I am in PA and will be launching a new online store that will be exclusively clothing (tees, fleece, etc). In PA, clothing is not taxed. I know that typically if a business has over $100,000 in sales (or 200 transactions) it has to collect sales tax and register for a license to do so, but I don't ever anticipate that being me. Under products, there is an option to check "Charge tax on this variant". Since my items are not taxable IN Pennsylvania, should I deselect this option? Or do I select it because someone in say, NJ, might buy it and THEY have sales tax on clothing? I am assuming that if I did have this option selected, I then have to report on my taxes that I collected it, and if I don't have it selected, the buyer is responsible for declaring it on their taxes? Is that how it works?
Your store will charge sales tax based on your tax settings in your settings menu. In there, you set up from which states' orders you will charge taxes. Checking/unchecking the charge taxes box in the product set up page, will affect whether or not taxes get charged on that product regardless of order location.
That said, I highly highly recommend you speak with a tax professional as to whether or not you need to charge taxes. Make sure you are aware of all the stipulations before you start selling.