State taxes are governed by a legal concept known as nexus. Basically, nexus means that a business, like yours, must have some physical connection to a state to be required to collect sales taxes there. “Physical connection” might be employees, a warehouse, or some other assets located inside the state. Simply shipping products via common carriers or directing marketing to customers in a particular state is not enough of a connection to establish nexus.
So if you are a Bevv seller, you need to decide which states you have nexus in. For most small Bevv sellers, nexus will just be with the state where you live. But there are certain cases in which you may develop “nexus” in another state: Are you crossing state lines to sell your items at a craft beer festival? In these cases and other similar cases, you may be considered to have nexus in a state other than where you live — which means that you may need to collect sales tax for sales to that state.
Once you’ve determined where you have nexus, you need to determine the sales tax requirements for those states. Some states have no sales tax, whereas others have strict sales tax laws. Please check your state and/or city websites for more information on tax laws in your area.
From there, you can find four important pieces of information:
- Are the items you sell taxable? (For most Bevv sellers, the answer is yes, but check your state to determine for sure.)
- For which customers do I charge sales tax? In some cases, only buyers in certain counties need to pay sales tax, whereas in other states, it’s everywhere.
- How much sales tax do I charge? The rates vary by state and by county, so check your state(s) to find out.
Here’s a list of what every state’s code of laws has to say about factors that create sales tax nexus.
Please consult your accountant or a tax attorney with any questions you may have regarding your business and its taxes.
Collecting Sales Tax Online via SBA.Gov - below is for additional reference only and should not be construed as tax advice.