I'm setting up CA State tax on all three of our websites and from what I can see on other forums the State tax is based on where the item is shipped to and not where the purchaser's home/billing address is. So if a customer buys an item in California (where our business address is) but has it shipped to Fiji then State tax does not apply.
"You can't walk into a jcpennys and avoid tax on something you mail to another state"
Actually, yes you can. If the store ships the item for you. I recented purchased a $300 item in Las Vegas while on vacation. The store shipped the item to my home in Pennsylvania and therefore did not charge me sales tax, even though I was standing right there in the store.
A simple call to your states Sales Tax office would be the best place to get advise on this though...
Although I should also point out that the reciever may need to pay USE TAX on the item when they recieve it. As I needed to do, so I didn't actually avoid the tax, I just paid PA's lower rate.
[edited by: Dogza at 2:50 pm (utc) on Mar. 28, 2008]
Ask your CPA, but most websites will charge tax where the item will be used. You can get the tax rates from a few of the electronic payment gateways even (since they can even vary city / county) if you get into that.