taxes on information products?

[jackson]

Hey forum....are you adding taxes to ie a CD?
I'm using a Paypal shoppng card, should I add my state's shopping tax or leave it out?

I'm doing a CD through cd-fulfilment.com
and doing $3.95 shipping charge for the US.

and 5.95 for international but maybe it would be better to just do all shipping, international and USA at 3.95 to make the pricing look more user friendly?? :confused:

[TimW]

A CD is a physical good and, as such, may require the collection of a sales tax depending on your taxing authority and jurisdiction.

Taxes are generally charged in the location where the person who purchased it lives. In the case of the Internet, most states do not collect/require sales taxes to be charged to your customer due to interstate commerce laws and Supreme Court Decisions. States usually require the payment of a 'use tax' for items purchased over the internet, for which the purchaser is responsible for reporting and paying to their state/locality...which almost never happens.

Thus, barring certain exceptions, and I cannot fathom to know your situation, you likely will not be charging your out-of-state customers a tax.

Some electronic downloads are also taxed, usually at a different rate, again, depending on the issues above.

[jackson]

My tax rate is 8.375
(new york city)
high...! Do you think that would detract customers?

[TimW]

Including state taxes, the rate folks who purchase from me and live in the same state is 8.5%

Anyone living outside of Arizona pays no taxes to me. What they do, or what their requirements are in their home, are of no concern to me.

I know I have lost business from Arizona residents who purchased the same items I sell from another state. There's nothing you can do about that if they are THAT price-sensitive. However, at some point, there's a trade off...shipping costs vs sales-tax. Over a certain price, shipping is the easy choice.

What you need is to sell them on buying from you for other reasons.

That said, even with the sterling rep I have and my awesome customer service, only about 8% of my business comes from within my own state.