To collect sales tax or not?

[northband]

We have a where we provide instructional training through the form of videos, web-text modules, and online testing.

We are wondering whether we need to collect sales tax? Our company is not in the US and so far we have been collecting sales tax but with the launch of a new service we're wondering if this is needed.

So curious - how many people out there are collecting sales tax on your apps?

Thanks!

[greenyoda]

According to Nolo.com[1]:

"If an online retailer has a physical presence in a particular state, such as a store, business office, or warehouse, it must collect sales tax from customers in that state. If a business does not have a physical presence in a state, it is not required to collect sales tax for sales into that state. This rule is derived from a 1992 Supreme Court decision which held that mail-order merchants did not need to collect sales taxes for sales into states where they did not have a physical presence."

Since your business, being located outside the U.S., presumably has no physical presence in any U.S. state, it doesn't seem like you need to collect sales tax.

[1] http://www.nolo.com/legal-encyclopedia/sales-tax-internet-29...

[patmcc]

Follow your local laws. If wherever you live/operate requires you collect sales tax, collect it. Some places have weird rules about this; maybe you have to collect sales tax from everyone, maybe only from residents of your country, maybe only from residents of your state/province, whatever. Look into it. This is the one you definitely can't mess with, if you don't make the effort you can be on the hook for serious penalties.

Once you've done that, as greenyoda says it looks like you're clear in the US. If you have any other large markets it's probably worth looking into them.