Sales tax for downloads?

[vicktornka]

Is there a way to see if my state requires me to charge/pay sales tax for downloaded merchandise?

[ichthyous]

Absolutely, call yur state department of treasury/finance/taxation. In New York and New Jersey you don't have to collect sales tax for electronically transmitted data (downloads/uploads)...but if your customer requests he same data be burned on CD and mailed to them it is a taxable event. Remember, you only have to collect sales tax for transactions which occurr within the state where your business operates, i.e. NY business-->NY customer. Downloads/uploads are always tax free even for transactions within your own state. There is some talk that interstate ecommerce will become taxed but it opens such a huge Pandora's box in terms of paperwork and reporting that i doubt it will happen.

[Sierra_Dad]

I have found that most sites with downloads do charge sales tax if the customer is within certain state(s).

Based on my understanding of Washington's laws, I have charged customers with a Washington billing address sales tax based on my zip code. They are a small subset of the orders.

Earlier this year I decided to simplify things on the shopping cart and for me by not charging sales tax. I will still have to report and pay sales tax for those within the state; I just decided to cover it.

Maybe I could find some provision that would allow me to not pay sales tax for elctronic download, but I don't know of one, so for now, I will be going through a bit more hassle, and a bit more money, for my instate customers.

[ichthyous]

perhaps it varies by state, I know in NY and NJ tax is not due for downloads, even if the customer is within the same state as downloads are not tangible items. Perhaps many websites collect sales tax on downloads because they know customers within their own states expect it, but then they dont send it in to the state