A brief Explanation!

[Azim]

Hello,

I am starting an online store in california and i am planning to have an account with dropshippers in utah, Who will be shipping the products to customers within U.S.A. Now i am in california and i have setup the california state tax(state, Fed), but i am lost that if the items are shipped from utah to customers do i need to charge those customers the california tax or utah taxes. And also do i need a tax id number to sell the dropshipping products. Or a resale permit.

[jhande]

Hello,

I am starting an online store in california and i am planning to have an account with dropshippers in utah, Who will be shipping the products to customers within U.S.A. Now i am in california and i have setup the california state tax(state, Fed), but i am lost that if the items are shipped from utah to customers do i need to charge those customers the california tax or utah taxes. And also do i need a tax id number to sell the dropshipping products. Or a resale permit.

 

Hi Azim,

Whenever planning to run a business, one should consult with your accountant or attorney.

Think of it this way - Who is actually receiving the money from the customer? You are correct.

So you are acting as a retailer and the dropshipper as the wholesaler. The tax responsibility lies in your lap per your local tax laws.

 

Check for California Government web sites on running businesses. You should be able to find information pertaining to your business tax laws.

This might be a place to start looking - http://www.taxes.ca.gov/soleprobus.html

 

Such as with me here in New Hampshire, we do not have State sales tax... but, I have to pay a business profits tax on any profit over $50,000.00

Also don't forget your business license or permit and tax ID#.

http://www.taxes.ca.gov/Small_Business/sta...rt_Permits.html