1. Is It Tax or Not Tax? Many websites that offer no-tax shopping actually use this as part of their marketing tactic. Technically, even when a business or website doesn't charge sales tax, the consumer is the one who is responsible for paying sales tax if the state requires it.

•  This brings up another issue-do you have to charge taxes or not? That depends on the state you are operating your internet business from as well as the state that you are sending your products to.

o If your state is physically located, either with a business office or a warehouse, in one state, then you need to charge tax to the customers in the same state who order products from your business via the internet.
o But if you don't have a physical presence in the state the person is purchasing from, then you don't have to charge them tax.
o For example, let's say you have a business selling gift baskets online, and you have an office in Arizona that assembles them. You must charge sales tax to your customers who live in Arizona who order from you. However, if someone from New York orders a basket online, you don't have to charge sales tax.

2. When it's up to the consumer.
Even if you live in a state that collects sales tax on internet purchases, it is still technically the responsibility of the consumer to pay the taxes, even if you don't collect it as a business owner.

• If a customer pays sales tax to the state instead of your business, it is called "use" tax instead of sales tax. Basically, it is the same tax, but the differentiation is in who is paying the state-with use tax, the customer pays, and with sales tax, the business owner pays.

3. Should you charge sales tax? Many big businesses, even those who have multiple stores or offices in every state, still don't charge sales tax on their items. So how do they get away with this?

• Many of these larger businesses have made their internet stores separate entities from their retail stores, so those who shop on the Internet are technically purchasing from a different store.