States In Which We Require Sales Tax
Mt Baker Vapor will now be collecting sales tax on all orders from Illinois, New York, Tennessee, Washington, Illinois, Pennsylvania, California, Arizona, Wisconsin, Oklahoma, Ohio, New Jersey, Nevada, Georgia, Florida and Texas in response to the State Nexus Law.
The Nexus Law determines whether an out-of-state business selling products into the state is liable for collecting the tax on sales in that state. We have been involved in trade shows and affiliate programs that have made us liable for collecting tax in certain states. This means we will be collecting the standard state tax on every order from the affected states. We apologize for any inconvenience that this may cause.
Please note, if you do not live in the states listed above and below, you will not be affected by this on your orders.
In addition to the sales tax, the nexus law may also impact the tax on shipping in specific states. Currently California does not charge tax on shipping. However, New York, Texas, and Tennessee do charge taxes on all shipping. Illinois also charges takes on shipping but only on selected items.
You can find a legal explanation of the reasoning behind Nexus Laws here. The most important paragraph is as follows:
Factor presence is dictated by the amount of property, payroll, or sales a business has within a state. Savvy readers will no doubt deduce that having a certain amount of property or payroll in a state is not the controversial part of factor presence. After all, any amount of property or payroll in a state gives a business a physical presence, which constitutes a taxable presence for all state taxes. The controversy with factor presence is the notion that a certain dollar amount of sales made in a state, even if there is no physical presence, creates nexus.
Despite its growing popularity, factor presence is not a new concept. The Multistate Tax Commission (“MTC”) first developed the idea of factor presence in 2002. The standard was meant to be a simple, certain and equitable standard for the collection of taxes. In the MTC’s version of factor presence, substantial nexus is established if any of the following thresholds is exceeded during the tax period: $50,000 of property; $50,000 of payroll; or $500,000 of sales. This standard allows for substantial nexus in situations where there is no physical presence as long as sales during the tax period are greater than $500,000. In spite of questions concerning its constitutional validity, several states have incorporated these standards into their statutory nexus standards.
If you have any additional questions or concerns, please feel free to leave them in the comments section below.
Here is a list of the states affected by Nexus Laws:
Washington, Illinois, Pennsylvania, New York, California, Arizona, Tennessee, Texas, Wisconsin, Oklahoma, Ohio, New Jersey, Nevada, Georgia, Florida.