Saying that the internet has changed the way we live is an obvious statement. The internet has transformed our forms of communication and our use of language as well as the way we conduct business. However, the one thing that has not changed is our duty to pay taxes, which includes paying tax on some online purchases
The current Arizona law is that if a business has a physical presence such as an office, warehouse or even a sales representative in Arizona, then the business owner must collect Arizona sales tax on internet sales to Arizona customers. But, a business that is based out of Montana for instance, which has no physical presence in Arizona, does not have to collect sales tax from Arizona residents. Montana, along with Alaska, Delaware, New Hampshire, and Oregon, is one of five states with no state sales tax. Generally speaking, if you are selling goods or products over the Internet to customers located in those states, sales tax for those customers should be a non-issue.This puts out-of-state businesses at an advantage when selling to Arizona customers.
There is an argument in favor of an online tax to be charged by all businesses: in-state businesses are forced to do business at a competitive disadvantage because they have to collect taxes and out-of-state online sellers do not, which can be up to a 10 percent price advantage, according to www.marketplacefairness.org and supporters such as Amazon.com and Overstock.com. A general online sales tax would affect online and catalog consumers because of the cost increase of the product due to sales tax. Many consumers probably never noticed whether they were paying tax for online purchases because they are used to paying sales taxes for other purchases. So the online sales tax issue is more likely one that businesses should keep an eye on because it will likely affect business in the not so distant future.
As someone who represents individuals and small business owners, we at Hymson Goldstein & Pantiliat, PLLC can help you navigate the internet and the issues affecting your online business.
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