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I'm starting a retail dot com in california where I live, and realizing that out of state companies will have big price advantage over me. Arnold now has an almost 10% sales tax in place.
Is there any way for me to register this new dot com in another state and avoid charging Cal sales tax to my customers?
If you have a business license in CA I don't think it matters where the dot com is registered, you'll still be liable for sales tax in CA. Maryland used to have relaxed laws concerning corporate licensing and years ago it was the place to register a business but I don't know if that still holds true.
I'm just wondering if you don't charge sales tax, do you have to pay sales tax.
I don't have a business license yet. I'm considering getting one in Nevada, if by doing so, I can avoid charging my customers Cal sales tax.Quote:
Originally Posted by roban
It does not matter where you register the company. If you have a physical presence in California, you will need to charge sales tax to those orders shipping within that state. The company I work for has it's headquarters and business license in Wisconsin. However, we have outside sales people and charge tax in those states where they are located.Quote:
Originally Posted by Dolph
I live in California, but don't have a place of business out here, sales office or anything like that. I could hire a fulfillment company out of state as well, so I'd actually be shipping from out of state. But I would have to take orders over the phone out here from my home, I guess. Oy! Sounds like I'm stuck. 10% sales tax! Sounds like the only way out, is to actually move out.Quote:
Originally Posted by JEccles
If anyone knows a possible way around this, please let me know.
Well, it may not be as hard as I thought. All I need to do, apparently, is hire a registered agent in NV or Wyoming or some other sate to serve as my business address. I've found them as low as $99/year. As long as I'm not shipping out of CA, I'm in the clear. I'll charge NV sales tax for my NV customers, and all others will be sales tax free including my CA customers.Quote:
Originally Posted by Dolph
Sorry, CA, but you finally drove me away.
Do any of you know if it would be possible to be registered as a corporation in Nevada using a registered agent and simply contract shipping out to be done in CA? Would I need to pay tax in CA because those items were shipped from CA?
Also what if my registered corporation out of NV was to simply take an order over the internet and then order the items from a CA based company and have them ship to the customer?
Thanks !
In my current business, which is not the one I had in mind for this thread, if I ship to a customer out of state, and happen to ship from a supplier in that same state, we still do not charges sales tax for that state.Quote:
Originally Posted by Gjks56
I may be wrong, but I don't think there's any way a NV company can charge CA sales tax, even if they drop-ship from a 3rd party that is in CA.
Now if you contract with a fulfillment company in CA, that may be a different story. But even then, I don't see how a NV company could pay CA sales tax.
Awesome thanks
With all the new CA taxes and web of crap they are driving business out of CA which is never good in such an unstable economy.
This might be useful info to check out if you are going to be incorporating in NV
CA Corporation Code 191
I'd be happy to do business in CA if they had even a reasonable sales tax rate. But an automatic 10% discount from my out-of-state competitors is driving CA consumers away from CA .coms. I'll admit, that when I'm purchasing online, I look non-CA .coms. Sorry, but I need to save money. And in starting a new company I have to put myself in the customers' shoes.Quote:
Originally Posted by Gjks56
BTW, here's a registered agent a friend of mine referred me to.
http://www.incorp.com/
I haven't checked it out yet, but he says they charge him $70/year and are in all 50 states. If true, it's the best deal I've come across.
i've got the same exact problem
i live in ca but need to figure out a way to avoid my ca customers from paying the outrageous ca sales tax.
unlike you, i think i'm going to have to ship from my home. i can't really find a dropshipper to get the items i need at the prices i want.
damn you california
If you ship from your home in California, and/or to a receiving address in California, I doubt there's a legal way to avoid the sales taxes.
Even some of the legal methods of avoiding taxes (out-of-state business registration, out-of-state inventory/shipping) may soon be shut down simply because the individual states are tired of people not paying the taxes due.
As an e-commerce seller in CA, it's painful as can be. Our rate is 9.75%
While I can't prove I'm losing customers because of the sales tax, it seems hard to believe it's not substantial. I know when *I* shop, I avoid CA online stores like the plague.
CA will get the message.... when it's too late and ALL the employers and businesses have left.
My one word of advice is not to sell on Amazon. They don't collect sales tax on your sale, but you're 100% liable for it. So you have to eat that 10% on top of their healthy commissions.