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Question - I live in California, I'm drop shipping from Las Vegas...question on taxes, shipping

Hi, I live in California, and my brother-in-law lives in Las Vegas where he has accumulated over 150,000 books.  I am going to list/sell, but product is being shipped from Las Vegas.  Questions:

 

1) If I live in California and I ship from Las Vegas,  who gets charged for sales tax?   California customers or Nevada customers? 

 

2) If I live in California, but ship from Las Vegas, books will ship via media mail with tracking.  Since labels are being shipped from my eBay account...should the labels have the Nevada shipping address or California address as the "mailed from" section. 

--My concern with #2 is if buyers check on the shipping tracking #'s, assume that product is shipped from California..and check the USPS tracking # and sees that it originates from Las Vegas and wonders what's going on...

 

Do dropshipping accounts just simply say something like "I'm in California but product is shipping from Las Vegas"...and that's sufficient?   Thanks for any help.  

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Re: Question - I live in California, I'm drop shipping from Las Vegas...question on taxes, shipping

They are....unless there is a physical presence in other states.....there are laws already in place for that in most states and have been for a very long time. This may be the issue as there is drop shipping involved....shipping from another location. Which could mean there is already a physical presence on 2 states at least.
Do not confuse what the supreme court ruling was about and what has been on the books for years.

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Re: Question - I live in California, I'm drop shipping from Las Vegas...question on taxes, shipping

I have a valid re-seller's permit in California because I used to just ship from California...but not sure of what do with the orders that I ship from Nevada

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Re: Question - I live in California, I'm drop shipping from Las Vegas...question on taxes, shipping


@littlehills-collector1 wrote:

I have a valid re-seller's permit in California because I used to just ship from California...but not sure of what do with the orders that I ship from Nevada


I'm not sure of what you think shipping from one state or another has to do with your collection of sales tax, except that it gives you a NEXUS in both states.  Since you have an established NEXUS in both states, I would think that you would be required to collect sales tax from buyers in both states and thus have to register to collect and remit Nevada sales tax. 

 

However, I don't see that it would matter where the item ships from, but rather where it ships to.  If the buyer is in California and the item ships from Nevada you would be required to collect the California sales tax and remit it to California.  If the buyer is in Nevada and the item ships from California you would be required to collect Nevada sales tax and remit it to Nevada.

 

Of course, as I understand the Supreme Court's ruling, they have stated that they have the right to levy sales tax on items purchased over the Internet by their residents.  However, the states that wish to do this need to pass legislation that actually requires online merchants to collect such a tax for them.  So the high court's ruling didn't add any taxes, but rather re-stated the state's rights to levy such taxes.

 

There are quite a few states that have already levied such a tax, called a USE TAX, on their residents.  Now it appears that the high court's ruling will allow state's to pass laws requiring merchants outside of their geographical boundaries to collect the tax for them.  This will probably bring about much confusion as states try to pass the required legislation and merchants attempt to comply.

"It is an intelligent man that is aware of his own ignorance."
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Re: Question - I live in California, I'm drop shipping from Las Vegas...question on taxes, shipping

How about you let your brother in law make his own account and sell them? This sounds fishy to me and it's why Ebay gets a bad name. So many people selling items they don't actually have in their own possession. How can you sell something you don't know the condition of? Setting yourself up for disaster, as most drop shippers so.
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Re: Question - I live in California, I'm drop shipping from Las Vegas...question on taxes, shipping


@steelernation2007 wrote:
How about you let your brother in law make his own account and sell them? This sounds fishy to me and it's why Ebay gets a bad name. So many people selling items they don't actually have in their own possession. How can you sell something you don't know the condition of? Setting yourself up for disaster, as most drop shippers so.

A perfect idea.

 

After all he can give you the log in info and you could help him refine the listings remotely. 

 

It's what I did with my FIL, though in that case I had to not only do a toatl rewrite but I also had to go to his house and take pictures because I couldn't even tell what they were pictures of.

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