How to pay state sales taxes on direct sales

Self-publishing authors who sell copies of their book through their Web site or the mail should take care to pay state sales taxes on orders shipped to customers residing in their home state.

Although the Internet is a "tax-free zone" in many respects, this does not apply to state sales taxes for goods sold to customers in your state. To pay the tax, you’ll need to open an account and obtain a "resale license," known as a resale number or sales tax certificate in some instances.

You don't collect state sales tax on orders shipped outside your state, however. This is because Internet sales — as well as fax, telephone, and mail-order sales — shipped to another state aren’t subject to sales tax unless you have an office or warehouse located there. In some states, shipping and handling fees are not subject to sales tax, but in some they are — you will need to investigate the issue for your home state.

Obtaining a resale certificate from your state tax office will relieve you of paying state sales tax on the items you buy for resale, but it will also obligate you to report and pay taxes on the sales you make to customers within your state.




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