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Purchases you make on the Internet are tax free, right? Wrong! The states are at it again trying to find new sources of tax revenue as we stare down a recession. They've now turned to trying to get the word out that you're legally required to pay sales tax on Internet purchases -- unless, of course, you live in a tax-free state. That's news to most people.
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This is not new and really not related to online or not transactions. The same rules apply for orders placed by phone or mail.
Businesses have always had to deal with use tax. A business must pay Calif the sales tax on their own purchases not for resale. Regardless of where you bought it from.
A business must collect sales tax in a state that has sales tax and where they have a corporate presence. Sometimes this is the one state you are incorporated in, but it will also include where your brick and mortar building is located.