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Home Explore Taxes - And Your Online Business

Taxes - And Your Online Business

Published by Joseph, 2015-02-23 20:02:33

Description: Doing business online is starting to be a much
preferred way of transacting business both by the
sellers and the buyers not only because it is way more
hassle-free than real shopping but also because it
provides a chance for a tax-free business transaction
to transpire.


Read the Text Version

Taxes - And Your Online Business(They will Catch Up On You)Doing business online is starting to be a muchpreferred way of transacting business both by thesellers and the buyers not only because it is waymorehassle-free than real shopping but also becauseitprovides a chance for a tax-free businesstransactionto transpire.

However, the happy days of transacting businesswithout worrying about the taxes that come alongwithit will soon be over because on July 1, 2008,Washington will be joining 18 other states inAmericathat oblige certain online or e-commercebusinesses topay and collect sale taxes.If you have an online business or if you areplanningto start one, then you will also be required tocollect taxes from your consumers or costumers ifeveryou are residing in a state that requires you topaytaxes.A State Law Passed In 2007

The changes to be implemented on July 1 are theresultof a state law passed in 2007. The certain statelawchanges the way the taxes are calculated - a majoralteration that spurs some headaches andconfusionamong all online retailers.Take this situation for example: if you decide toshopand purchase in a shop or store, you are obligedtopay the tax rate depending on where the store islocated. However, if you decide to have the stuffsthat you purchased delivered to your doorstep,you areobliged to pay for the tax rate of your state.In technical terms, the tax system will be changedfrom origin-based to destination-based.

The Tax Is Not Levied On The BusinessYes, you read that right - the tax is not leviedonthe business, instead, it is levied on the partof theconsumer. It is the obligation of onlinebusinesses tocollect tax from its consumers and remit it to thestate.The government is strictly issuing penalties forbusinesses that fail to adhere to the law.Online businesses are not excused from this law,infact, more law enforcers and agents are being senttocheck on the legality of online stores andbusinesses.One common Internet myth is that the Internet Tax

Freedom Act allows online businesses from beingexempted from collecting sales tax from theirconsumers. It is truly considered as one big mythbecause in reality, it does not actually stop thestates from collecting sales tax on onlinebusinessesand other e-commerce.Sure, the Internet Tax Freedom Act does not imposesales tax on Internet access fees but aside fromthat,taxes are already imposed.When You Make Money Online, You Have To Pay TaxesWhenyou earn, you really have to pay taxes; it 抯 aknownfact and perhaps what we can call a bittersweetreality. Sure, it may be a bit difficult on ourpartto surrender a part of our hard-earned money fortax

dues but the truth is, everyone is doing so.All income-generating businesses and stores arerequired to pay their due taxes. A law is a lawand itmust be followed at all costs. Some people who areinvolved in online businesses try to doge theirtax-paying responsibilities. They think they aresmartenough to be able to escape their tax-payingdutiesbut the truth is, they 抣 l get into deeper troubleoncethe government finds out their dirty work. If youwantto be successful in your carrer as an onlinebusinessman/woman, try to be as clean and honestasyou can with your taxes and your online business.

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