The U.S. Supreme Court has turned down appeals by online retailers to be exempted from New York’s sales tax law, despite the companies having no physical presence in the Empire State.
What does this development mean for your small business’ online sales?
Until that happens, online retailers are left to deal with a patchwork of state laws, which in New York means that most online retailers must collect New York sales tax from customers in the state.
How Does This Affect Your Online Business?
If you’re a small business owner who conducts out-of-state sales to customers in states like New York, you may need to modify your online sales practices.
- Enter into purchase agreements with New York residents and
- Gross more than $10,000 from New York customers in the preceding four tax quarters.
For small businesses whose online sales do not account for more than $10,000, regardless of the state, the New York law should not affect tax liability.
However, if you ring up more than $10,000 in sales with New York customers, or your business is growing rapidly, you may want to consider speaking with an experienced tax attorney on how to handle New York sales tax.
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