Internet business taxes.

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Old 03-05-07, 10:47 AM
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Internet business taxes.

Internet business taxes? is there anything like this?

Anyone who can give insights on how do income from internet be taxed?

And how much percentage is being imposed on them?

Please give us your ideas for us to be aware of.
 
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Old 03-05-07, 11:36 AM
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Check with your local department of revenue.

In Florida, by law, sales tax is due on ALL items purchased (except those purchased for resale), regardless of where they were purchased FROM.
Florida goes so far as to say that, if you sell to someone inside the state, you are to collect the tax that would be due in the customers home county, not yours. I don't think anyone does that, they just collect the tax for their own county/area.

That means if you order something over the internet and that site does not collect Florida sales tax, you are legally obligated to mail the amount of tax due to the department of revenue yourself. Does anyone do it? Course not, except maybe large businesses.

On the other hand, there are specific requirement on if, when and how you can collect sales tax from out of state customers. Most states I believe require that if you have a physical presence in their state, you collect sales tax for any sales to that state, even if the sale originated out of state.
This is why you see some ads that say tax is due on these states xx, xx, xx.

As for income, money is money, regardless of it's source, and the IRS (and your state, if you have a state income tax) wants their cut.
 
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Old 08-19-07, 09:11 AM
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An internet based business is still a business, therefore net income is taxed just like a brick & mortar business. Your tax is based on where your business is located (where you sit when you run it or where your warehouse is) not cyberspace.

Sales tax is another matter. Most states, if you sell / ship to within the state you business is located, you must charge sales tax. Just like on tv, phone or mail orders where you see xx residents add x% sales tax. If you have locations (any physical presence) in more than one state, you must charge tax on sales to each of those states. You will have to get a tax id number or resale certificate from each of those states, and do the required returns, generally monthly.

Some states, such as here in Arkansas, have what's called a use tax. If I buy from out of state, on the internet or whatever, and don't pay sales tax, I'm supposed to put it on my tax return, personal or business, and pay the AR use tax (equal to sales tax). I didn't know that til a few weeks ago, and I'm sure most people don't know and don't pay it.

I think a lot of states have similar that few know about, but this will start being enforced as they want the sales tax revenue. Personnally, I think the easiest thing is to have everyone charge the sales tax for where they are selling from. It'll all wash out in the end that way.
 
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