Question

State governments are considering taxing online purchases of goods through Amazon. Should sales taxes on goods purchased through Amazon be paid to the government by consumers or producers? brief explanation please

Answer 1

The seller is responsible for paying sales tax to the CDTFA on their taxable transactions. A seller is generally allowed to collect the sales tax from the customer; however, the seller owes the tax even if they do not collect it from the customer.Taxes on goods and services are commonly referred to as consumption taxes. Retail sales tax and value added tax are examples of a consumption tax. A consumption tax is charged when consumers spend money.

The basic rule for collecting sales tax from online sales is:

If your business has a physical presence, or “nexus”, in a state, you must collect applicable sales taxes from online customers in that state.

If you do not have a physical presence, you generally do not have to collect sales tax for online sales. However, in June of 2018, the U.S. Supreme Court issued a ruling that will likely change this exemption to collecting sales tax. States are expected to begin collecting sales taxes regardless of having a physical presence in the state.

A physical presence means that you have some business facility in that state. It could be any type of business operation, such as:

A storefront
An office
A warehouse