Taxes - And Your Online Business

(Taxes Exist Online?!)

So, you want to start your own online business? Before

you start designing your own website or webpage, make

sure that you know all about the do and don of

starting an online business and that includes the

technical, financial and legal matters of the

business.

When you decide to start a business, you should be

aware and prepared for whatever legal or financial

issues that may arise. If you think that you can

escape from paying taxes by starting your very own

online business, think again - your dreamy balloon may

burst once you get into complications regarding taxes

and your online business.

The Truth About The Internet Being A Tax-Free Zone

More and more shoppers are getting lured by online

shops and retailers because of their famous tag line

of "no-tax shopping". What most people don know is

that that certain tag line used to lure online

shoppers is not applicable to all states.

For you to be able to understand this concept better,

here is an example: A woman from Indiana regularly

purchases exotic orchids through an online shop based

on Switzerland.

Since she purchases and sends her payments directly to

Switzerland, she is not obliged to pay any sales tax

in Indiana since her orchid supplier has all of its

facilities in Switzerland.

A few months later, the exotic orchid supplier of that

woman has decided to open a store in Indiana. The

woman still purchases online but she already has to

pay for the sales tax of the orchid since there is

already a store based in the place where she is

staying.

In other words, the responsibility to pay for taxes is

an interdependent status between the consumer and the

supplier. By that example, we can Come to a conclusion

that the Internet is not really a tax-free zone. It

depends on the location as well as the type of

business that one is involved in.

The Responsibility To Pay Sales Tax

Admit it, nobody really loves to pay taxes. Perhaps

even the rich people are irritated come tax-paying

time because it is sometimes a tedious and complicated

process. There are a lot of rules and laws to refer to

before one can actually come to a clean calculation of

the taxes that he or she must pay.

If an individual lives in a state that is known for

collecting "sales tax", you are not exempted from it

even though you try to escape it by making a lot of

purchasing through the Internet because you are still

required to pay for the "sales tax" directly to the

state.

When you pay a "sales tax" directly to the state, it

is no longer called a "Sales tax" but rather a "use"

tax. Perhaps the only difference between "sales" tax

and "use" tax boils down as to which person - the

buyer or the seller - pays the state. "Use" taxes are

usually used by the state to make sure that they

collect the right amount of revenue on every taxable

item purchased within the state borders.

There are actually still a lot of points to be

discussed about taxes and online business and the

points mentioned here are just what we may call "a tip

of the iceberg".

In determining what the right thing to do in

handling taxes and your online business, it would be

best to go beyond researching for legal answers alone.

Consulting the help of lawyers and other legal

professionals would probably benefit you more than you

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