Need clarification on Ecommerce Sales Tax and NY Counties

[Harold Mansfield]

I've been under the assumption, when it comes to ecommerce, that if you need to charge sales tax, it is what ever the rate is of the state/county that you are licensed in and selling the product from.

Now I have a client telling me, that his accountant told him, that for people who order online from the state of New York only, he needs to charge sales tax according to what country they (the customer) is ordering from/live in.

This makes no sense to me. Why would you need to charge the sales tax of a county that you aren't licensed in, nor are selling from?
And if this is the case then why doesn't the same rule apply for every other county in America that people order from online?

Can anyone shed any light here? Does NY have some special ecommerce tax rules that are different from the rest of the United States?

[billbenson]

I had a weird one the other day. A customer wanted a copy of their receipt. They were in Illinois if I remember correctly. They said they had to pay sales tax for all online purchases. This was a company, not an individual. I've never run into this before. I thought I only had to charge tax in Florida where I live.

[Evan]

Why would you need to charge the sales tax of a county that you aren't licensed in, nor are selling from? Does NY have some special ecommerce tax rules that are different from the rest of the United States?

I'm not sure of all the intricacies of the sales tax in New York State. But if you have a business in NYS, and are delivering goods to a business in NYS, you must charge NYS sales tax on those items.

ALL cities/counties that assess sales tax do so through the NYS, therefore, the "combined" sales tax rate differs from city-to-city. Therefore, if a seller lives in Albany and is shipping to NYC, the sales tax rate he must collect from that person would be different than it would in his town, Rochester, or Buffalo (assuming they all have different rates). When he files his sales tax return, he'd have to report where his sales are by county in the state.

[Harold Mansfield]

So does this apply to everyone, or just people who live in NY? Am I responsible for charging NY sales tax to every customer who lives there, even though my business is in NV?
OR is it just if your business is in NY and are selling to other New Yorkers that you have to charge the differing sales taxes?
And doesn't that apply for online orders?

[Evan]

I had a weird one the other day. A customer wanted a copy of their receipt. They were in Illinois if I remember correctly. They said they had to pay sales tax for all online purchases. This was a company, not an individual. I've never run into this before. I thought I only had to charge tax in Florida where I live.

Sales tax is only assessed when shipments are made in the same state. But if you deliver a product to me in CT from your office in FL, you're not charging me CT sales tax (as you don't do business here), nor FL sales tax. But I am, as a business, still obligated to pay a "use" tax which is equivalent to the sales tax rate. So if I purchased $10K of online merchandise instead of at Staples or local stores to save my state's 6.35% sales tax, I still have an obligation to pay that 6.35% sales tax.

Most people are largely unaware that they are supposed to be paying this use tax on their products. However, if you are a retailer and collect and remit sales tax, and end up purchasing items yourself that weren't subject to sales tax and DON'T pay the use tax, generally if you ever have a sales tax audit and you feel "fine" because you did things correctly -- you usually will be nailed to the cross when they ask about your purchases and whether you remitted the "use" tax. For that reason, sales tax audits are probably the worst thing to undergo as it's often forgotten about by most people. Income tax audits at least you know that there may be a reason for it occurring -- not so much with sales tax.