thread Re: Sales and Use Tax in Payments Troubleshooting

Sales and Use Tax

txwholesaleblan — Sat, 20 Sep 2025 14:19:55 GMT

I am in a origin based sales tax state which means I charge EVERYONE sales tax no matter where they live. Why does the sales tax disappear for anyone outside of my state?

Re: Sales and Use Tax

HeatherM — Tue, 03 Sep 2019 21:39:27 GMT

Assuming you're in Texas as your name implies, you do not collect Texas sales tax on orders delivered outside of Texas...

What if I sell to customers outside of Texas?

You do not need to collect sales tax on items you deliver directly to out-of-state locations. To document such a sale, your records must include proof of delivery, such as a bill of lading, a shipping invoice or a postal receipt. You may have to collect tax in another state if you are engaged in business there. You should contact the states where you buy or ship merchandise to find out if you are responsible for paying or collecting their taxes.

https://comptroller.texas.gov/taxes/publications/94-171.php

Re: Sales and Use Tax

gillym82 — Fri, 06 Sep 2019 16:08:02 GMT

Technically not true. Origin based states charge retail tax based on where they get shipped from, even out of state.

Sales Taxes in Origin-Based States

Relatively few states have origin-based taxes where a sale is considered to take place at the location where it's completed, even if the product is shipped elsewhere. If you're running a business in an origin-based state, you will collect sales taxes for your state on all your retail sales.

Re: Sales and Use Tax

HeatherM — Fri, 06 Sep 2019 17:23:33 GMT

I'm not sure how you can say that when the link I posted is directly from the Texas comptroller's office.

I also tried to post the information from my state (PA) which is an origin state with the same basic information, but it was tagged as spam for some reason.

Having had businesses in two origin states (PA and IL), they both have the same basic rules. Orders shipped out of state are not taxable in the state so long as you can prove they were in fact shipped out of state. You MAY however be liable for collecting tax in the destination state.

Now if I ship something within the state (PA) I collect the sales tax based on my location ("ORIGIN"), not where it's being delivered in the state (such as Philadelphia which has a higher tax rate than my location).

People should check directly with their state, and not some general information site that may contain incorrect information.

Re: Sales and Use Tax

nika — Wed, 11 Sep 2019 14:21:21 GMT

Hello everyone. Thanks for all of the input on this thread!

Just want to clarify the answer for @txwholesaleblan's original question: Right now, tax is only applied to online sales shipped within your state. For more specific information on calculating and charging taxes, this is the site you'll want to reference.

How to handle taxes when they're different based on where you ship product to?

joshdwhit — Sat, 14 Dec 2019 20:11:57 GMT

Our accountant says we have to charge taxes based on where we mail the product, and it could have city, state, even county taxes. How do I make sure that's charged?

Re: How to handle taxes when they're different based on where you ship product to?

nika — Mon, 16 Dec 2019 16:53:28 GMT

Hey @joshdwhit! Take a look at the link I posted above from last time. Hopefully this helps clear up the shipping and tax confusion!