Online Retailers Beware: States Broaden the Tax Net

How Online Retailers Need to Respond
Sales tax collection responsibility is an issue that no online retailer wants to hear about for the first time during a state tax audit. In almost every state, the party responsible for payment of a sales tax isn't the company that's made the sale. Ultimate responsibility lies instead with consumers making purchases. When a seller has sales tax nexus in a state, its role is limited to collection and remittance of the tax. If a seller doesn't have sales tax nexus, it has no obligation to collect tax. The consumer in this case is obligated to self-assess a “use tax.”