Internet sales tax is a tax that is levied on all internet-based services. Internet access taxes normally take the form of taxation on Internet service provider (ISP) access charges. ISPs levy these charges on users. At present, these charges are basically executed at the state level. There is no national tax on ISP user charges.
It is important to state that there is no uniform description of Internet access tax; they fall within the category of sales taxes in some states, and telecommunications taxes in others; and they are considered service charges, which are usually exempt from taxation in still other states.
If you run an internet – based business in the United States, especially businesses that involve selling on the Internet to states around the country, then you should be aware that states have enacted laws requiring the collection of sales taxes by online sellers. In order for a given state to require you to collect sales tax, that state must pass a law allowing it to do so.
On June 21, 2018, the United States Supreme Court fundamentally changed the rules for collection of sales tax by Internet-based retailers. In its decision in South Dakota v. Wayfair Inc., the Court effectively stated that individual states can require online sellers to collect state sales tax on their sales. This ruling overturned the Court’s 1992 decision in Quill Corporation v. North Dakota. The Quill case prohibited states from requiring a business to collect sales tax unless the business had a physical presence in the state.
Interestingly, a several states already have enacted new laws and these laws refer to online sellers as “remote sellers.” In most cases, if a remote seller has either:
- A minimum number of separate sales to customers in the state; or
- A minimum dollar amount of sales to customers in the state,
the law requires the seller to collect and pay sales tax. In addition, the seller must register with the state’s taxing authority.
The following states do not have an Internet sales tax:
- Alaska
- Delaware
- New Hampshire
- Montana
- Oregon
These are the states in the United States and their internet sales tax status;
Alabama
Alabama is one of the states that has internet sales tax.
- Internet Sales Tax Start Date – October 1, 2018
- Minimum Sales Thresholds – $250,000
Alaska
Alaska happens to be among the states that don’t have internet sales tax
Arizona
Arizona does not have internet sales tax.
Arkansas
Arkansas has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 1, 2019
- Minimum Sales Thresholds – $100,000 or 200 transactions
California
California has internet sales tax and these are the details;
- Internet Sales Tax Start Date – April 1, 2019
- Minimum Sales Thresholds – $100,000 or 200 transactions
Colorado
Colorado has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Dec. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Connecticut
Connecticut has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Dec. 1, 2018
- Minimum Sales Thresholds – $250,000 or 200 transactions
Delaware
Delaware happens to be among the states that is yet to inaugurate legislature that supports the collection of internet sales tax.
District of Columbia
District of Columbia has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Proposed
- Minimum Sales Thresholds – $100,000 or 200 transactions
Florida
Florida is also another state that does not have internet sales tax.
Georgia
Georgia has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 1, 2019
- Minimum Sales Thresholds – $250,000 or 200 transactions
Hawaii
Hawaii has internet sales tax and these are the details;
- Internet Sales Tax Start Date – 1, 2017
- Minimum Sales Thresholds – $100,000 or 200 transactions
Idaho
Idaho has internet sales tax and these are the details;
- Internet Sales Tax Start Date – July 1, 2018
- Minimum Sales Thresholds – $10,000
Illinois
Illinois has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Indiana
Indiana has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Iowa
Iowa has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 1, 2019
- Minimum Sales Thresholds – $100,000 or 200 transactions
Kansas
Kansas is yet to pass into law internet sales tax.
Kentucky
Kentucky has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Louisiana
Louisiana has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 1, 2019
- Minimum Sales Thresholds – $100,000 or 200 transactions
Maine
Maine has internet sales tax and these are the details;
- Internet Sales Tax Start Date – July 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Maryland
Maryland has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Massachusetts
Massachusetts has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – $500,000 or 100 transactions
Michigan
Michigan has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Minnesota
Minnesota has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – 10 retail transaction totaling $100,000 or 100 retail transaction
Mississippi
Mississippi has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Sept. 1, 2018
- Minimum Sales Thresholds – $250,000
Missouri
Missouri happens to be among the sates that is yet to pass into the law the collection of internet sales tax.
Montana
Montana also is among the state that does not have internet sales tax.
Nebraska
Nebraska has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 1, 2019
- Minimum Sales Thresholds – $100,000 or 200 transactions
Nevada
Nevada has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Proposed
- Minimum Sales Thresholds – $100,000 or 200 transactions
New Hampshire
New Hampshire is yet to pass into law the internet sales tax.
New Jersey
New Jersey has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Nov. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
New Mexico
New Mexico is also among the states in the United States that is yet to pass into law the internet sales tax.
New York
New York has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 15, 2019
- Minimum Sales Thresholds – $300,000 and 100 transactions
North Carolina
North Carolina has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Nov. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
North Dakota
North Dakota has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Ohio
In the state of Ohio, there is no internet sales tax.
Oklahoma
Oklahoma is among the states that is yet to pass into law the internet sales tax.
Oregon
In Oregon, there is no internet sales tax.
Pennsylvania
Pennsylvania does not have internet sales tax.
Rhode Island
Rhode Island has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Aug.17, 2017
- Minimum Sales Thresholds – $100,000 or 200 transactions
South Carolina
South Carolina has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Nov. 1, 2018
- Minimum Sales Thresholds – $100,000
South Dakota
South Dakota has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Nov. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Tennessee
Tennessee has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Pending further legislation
- Minimum Sales Thresholds – $500,000
Texas
Texas is among the states in the United States that is yet to pass into law the internet sales tax.
Utah
Utah has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 1, 2019
- Minimum Sales Thresholds – $100,000 or 200 transactions
Vermont
Vermont has internet sales tax and these are the details;
- Internet Sales Tax Start Date – July 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Virginia
Virginia is also among the states in the United States that has no internet sales tax.
Washington
Washington has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
West Virginia
West Virginia has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Jan. 1, 2019
- Minimum Sales Thresholds – $100,000 or 200 transactions
Wisconsin
Wisconsin has internet sales tax and these are the details;
- Internet Sales Tax Start Date – Oct. 1, 2018
- Minimum Sales Thresholds – $100,000 or 200 transactions
Wyoming
Wyoming is also among the states in the United States that is yet to pass into law the internet sales tax.