Hi!
My business is located in California but shipped out of state.
Then I received a notice from the Shopify that the number of sales transactions to customers in New Jersey exceeds 200 for this time.
So, do I have to collect sales tax from the client who lives in New Jersey from this time?
I need some advice.
Thank you!
As a general rule, if your business is located in California and you sell products or services to customers in other states, you are not required to collect sales tax from those customers unless you have what is known as “nexus” in that state. Nexus refers to a significant connection or presence that your business has in a particular state, which could include having a physical location, such as a store or warehouse, in the state, or having employees or independent contractors working in the state.
In the case of New Jersey, the state’s sales tax laws require businesses to collect sales tax if they have nexus in the state and if they make sales of tangible personal property, certain services, or digital products to customers in the state. If you are making sales of these types of products or services to customers in New Jersey and you have nexus in the state, then you will be required to collect sales tax from those customers.
It’s worth noting that the threshold of 200 sales transactions to customers in New Jersey that you mentioned may be relevant for determining whether you are required to register for a sales tax permit and collect sales tax in the state. However, this threshold does not necessarily determine whether you have nexus in the state for sales tax purposes.
I would recommend consulting with a tax professional or reviewing the guidelines on the New Jersey Division of Taxation’s website to determine whether you are required to collect sales tax from your customers in New Jersey.
Hi Niclas,
If I understand this correctly, You are not suppose to charge or apply tax in orders made outside of your state unless you have significant presence in that other state?