So - just catching up on this - here is what I know from working with multiple states and having to setup the varying tax settings in a PoS system to accommodate:
A quick statement on internet tax amounts - though the companies should pay tax to the respective states they are selling products to - it is extremely difficult to enforce - but could be done.
There is not always a sales tax present when a purchase is made.
There are Federal, State, County, Parish, City, and sometimes district rates that MAY be present in all transactions - sadly, even some lemonade stands are taking heat.
Most dealings I have had in the states for interstate commerce (which if businesses are, they should be registered with all appropriate tax authorities):
- If during a transaction there will be sales tax, the sales tax for that location (taking into account all those listed above) will be applied if the item is "obtained" at that time.
- If during a transaction there will be sales tax, and the item will not be obtained at the time of the transaction - the appropriate sales tax for the destination will be applied.
Some Examples:
Selling an item in Texas, to a recipient Texas - the local sales tax amount is applied and paid appropriately.
Selling an item in Texas, to a person taking delivery of the items in New Mexico - the New Mexico interstate sales tax amount is collected.
The reason I note it as "interstate" is that if there are multiple rates of tax across a state due to county or city differences - then typically a base amount is approved by the sales-tax licensing authority for the state. Some things make it easy, some more complex - so to simplify it, and still generate revenue for sales-tax license issuing entities - they provide the amount you would collect and pay to them during a transaction.
simple example:
New Mexico used to have a flat state sales tax rate of 5%
- didn't matter where you were or what you bought in the state (minus hotel, airfare, etc.) - the sales tax rate used was 5%.
complex example:
Oklahoma - when obtaining the sales-tax license for Oklahoma, there were over 40 different tax rates that could apply based on where the customer lived, etc.
- In order to determine what needed to be done - we contacted the Oklahoma authorities and they advised we collect an average amount. All of which would be remitted to them, and they could distribute as, well - however they decided.
All receipt of sales tax amounts are to be remitted to the appropriate state/authority as determined by license.
I've actually dealt with tax rates and agencies in NM, TX, CO, OK, KS and now CA and NV.
It's basically the same for them all... Whether or not everyone else plays by those rules - well, they don't.
