Search
Recommended Sites
Related Links






   

Informative Articles

4 Simple Steps to Reduce Your Taxes
With Tax Season upon us, here are 4 simple steps to lower your tax bill this year. STEP #1: Understand How Serious Your Tax Problem Is Are you aware of just how much in taxes you are paying? Here's how much the average family spends on various...

Business or Hobby...What Would the IRS Call YOUR Business?
One thing we know for sure. direct sellers start their businesses for a wide variety of reasons. Some want to build a dynasty, some want the tax benefits, some do it to buy and share a product they believe in, while others are simply looking for...

Capturing 401(k) Benefits Without The Hassle
A "non-qualified" deferred compensation plan might make more sense for your key employees. Recruiting and retaining the best managers often require business owners to offer competitive, tax-advantaged compensation packages. Yet, the tax laws...

Decision With A Mortgage Calculator: When To Foreclose?
One of the best places, you hope, to sink your capital for a good return is in real estate. However, when you provide the financing for someone to purchase their own home, your capital is tied to their ability to pay back the loan. If they start to...

Hawala, or the Bank that Never Was - Part I
I. OVERVIEW In the wake of the September 11 terrorist attacks on the USA, attention was drawn to the age-old, secretive, and globe-spanning banking system developed in Asia and known as "Hawala" (to change, in Arabic). It is based on a short...

 
Legally Avoid Out of State Use Taxes



Use tax for out of state sales





In recent years, most states have stepped up their attempts to require out-of-state retailers like EBay store operators and telemarketers to register for the purpose of collecting their use taxes.





The good news about use tax





Unless you have a 'physical presence' in a state, you can legally avoid registering for and paying its use tax.

A state's taxing power extends only as far as it borders. A state cannot force you to pay its taxes unless you do something in its borders. And for all you eBay sellers out there, simply selling merchandise to residents of a state does not qualify as having a 'physical presence' in your customer's state.





Accounting lingo





The Supreme Court of the United States has ruled that you must engage in a minimal level of physical activity within a state in order to establish a connection. Making sales in a state, via internet or mail order is not enough activity to establish a connection.





What will make a connection?





You may be required to register for and pay use tax if you:





1. Maintain an office, store, or other business facility in the state.

2. One of your employees (or you) enters the state to take orders, perform services, or otherwise do business on your behalf.

3. Real property that you own or lease is located in the state.

4. Personal property that you own or lease is stored or used in the state on a more than occasional basis.





Basically if you limit your contact to mail, email, and telephone you shouldn't be required to register for, collect or pay a states use tax.



About the author:

About the Author: Jacob Wren is editor of the small business resource site small business assistance. Visit http://www.small-business-assistance.com/accounting/ for more small business accounting tips.

Sign up for PayPal and start accepting credit card payments instantly.