thread Online Sales Tax Reporting in Payments Troubleshooting

Online Sales Tax Reporting

MSWood — Sat, 20 Sep 2025 19:40:04 GMT

I am new to the online store. I will be selling wood crafts. I understand how to collect sales taxes with POS and have all of my state sales tax reporting down. I am confused when an item is sold within my online store and mailed within my state and out of state, I understand how Square automatically figures the sales tax based on the address delivered and deducts it from the money going into my account. Do I have to report the sales tax on the online sales or is this taken care of an Square's end. I just want to make sure I am doing every thing correct. Thank you for any help.

Re: Online Sales Tax Reporting

JK_Fiber_Art — Sun, 31 Mar 2024 13:28:29 GMT

Hi Mswood,

Square only keeps track of your sales tax and will provide a 1099 however, it's your responsibly to file and pay and taxes collected either online or in person. Note, the only funds that Square retains from sales are the processing fees - the remaining balance (which includes taxes collected) is deposited into your bank account. Hope that makes sense.

Re: Online Sales Tax Reporting

MSWood — Sun, 31 Mar 2024 16:33:05 GMT

Thank you so much for your quick reply.

I am so new to this and its been a learning curve. SO I think finally got this figured out. Since I will not be selling anywhere near most states safe harbor I only need to collect sales tax for all sales that my business has nexus. So for me I am in New York and have no presents in any other state. (just a small wood craft business in my garage), If I sell and ship an item to someone out of state I don't need to collect and report sales taxes for that state. As long as my sales for that state are under the safe harbor thresholds. Of course if I ship an item to someone within New York yes I have to collect and report the sales tax.

https://www.salestaxinstitute.com/resources/economic-nexus-state-guide

Hopeful I have this correct. Once again thank you for your assistance.