One of the benefits of starting an online store is you aren’t always required to collect sales taxes.
If you are planning or have been selling online and you want to make a decision on rather or not you need to collect sales tax, we recommend doing a quick google search asking if your home state has sales tax at all, Even though most states do impose sales taxes, states like Oregon and Alaska don’t.
When Online Sellers Are Required To Collect Sales Taxes
The basic terms for sales tax collection from internet sales are:
- If your online venture has a physical location in a state, such as a storefront, an office, or a warehouse, you then are required for collecting sales taxes from your internet customer for the state you have a physical location in.
- If you don’t own any physical location(s), you don’t necessarily have a requirement to collect sales taxes from your online customers.
Which States Do Not Collect Sales Taxes?
As of January 2021, Alaska, Delaware, Montana, New Hampshire, and Oregon do not collect sales taxes for physical businesses nor online businesses.