QUESTION.
When operating an Internet business in Philadelphia, PA. I know there are no occupancy laws and I am aware of the need to register with the state to charge sales tax. If I decide to attend craft shows in Pennsylvania and other states, what other laws would pertain to my business?
ANSWER.
Many Internet businesses don’t bother registering with the state so they can pay sales tax. The only sales they have to collect tax on is sales made to residents of the state in which they are headquartered. If your offices are in Pennsylvania, then you should collect sales tax on sales to Pennsylvania residents. Therefore you really should register with Pennsylvania to charge sales tax. If your company has a physical presence in a state other than Pennsylvania, then you would be expected to collect sales tax in that state for sales made to its residents. And you’d need to register with that state, too.
Regarding your Internet business, I recommend you get and read “The eBay Entrepreneur” by Chris Spencer (ISBN: 141958328X). This book covers most of what you need to know in running an Internet business. This is true even if you are not interested in selling on eBay. Also, read my book review for the book I’ve posted at Amazon.
With regard to selling at craft shows, it is unlikely that anyone would consider you having a physical presence in the state where the craft show is situated. Unless of course, that craft show is in Pennsylvania. Technically you are present in the state when you make the sale at the craft show there and you really should be collecting sales tax on those sales for the state where you make the sale. However, from a practical standpoint, it is very hard for the state to regulate such sales. And you don’t have a mailing address in the state anyway when outside of Pennsylania. So don’t worry about collecting sales tax at the craft shows outside of Pennsylvania unless you attend a lot of them in one particular state. The states where you do a lot of business through craft shows are ones you probably should register with in order to pay sales tax to them.
I hope my comments are helpful to you. Good luck! Regards, -Jeff
Jeff Lippincott
SCORE.org Counselor
Princeton, NJ
scoreprinceton @ aol.com
www.scoreprinceton.org
www.jlippin.com
