The Crisis Facing Online Sellers

         The number of Online businesses is growing by leaps and bounds. It is the easiest and fastest way to become an entrepreneur. For those looking to start out on this road, it is best to calculate what will be legally required from them. The tax requirements have changed drastically, and the penalties for ignoring them are severe.

          Many Online businesses did not feel they were required to pay sales taxes because they did not have a physical presence where they did business. Court rulings have changed that perspective. Essentially, wherever the sale takes place, sales tax must be collected. Starting in 2016, California began sending out collection letters demanding back taxes, along with the penalties and interest for non-payment. There are now 45 states that collect Online sales taxes and many of them are following the example of California.

          Many of these business owners use Online Marketplaces as their virtual storefronts. They may send their goods to a nearby warehouse where it will be stored until a sale. The company that operates the warehouse may move the items as it sees fit. Wherever they go, many states are now considering that action as having a physical presence in the state. This can give rise to a claim for collection of sales taxes. Some owners are now paying off previously unknown tax bills that are nearly 10 years old. They feel that the current approach to Remote sales tax is unfair to small businesses. This is the state that many find themselves in. This calls for excellent record keeping if you want to get into this field. Having knowledge of the tax requirements ahead of time will allow you to manage it effectively.

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