When I purchase retail online from an out-of-state vendor, I am not charged sales tax in this state.

However, as I understand it, while Smug is the agent providing the print - and in another state - both I (effectively the seller) and the buyers are in-state, thus the full amount is taxable.

Here's the relevant tax code for anybody who's interested:

C. Tangible Personal Property Shipped into this State. In those cases in which tangible personal property is shipped into this State pursuant to a contract of sale, the sale will be considered to be made in this State if both of the following tests are met:

(1) The contract of sale is entered into either conditionally or unconditionally in this State by or on account of a nonresident seller who has in this State a place of business from which sales are made or a sales office.
(2) The delivery of the tangible personal property is made by the seller to the buyer in this State. Delivery of tangible personal property will be considered as made in this State if either:
(a) Physical possession of the tangible personal property is transferred by the seller to the buyer in this State; or
(b) The tangible personal property is shipped by the seller from a point outside this State to a buyer in this State either by common carrier or mail, whether the shipment is F.O.B. the seller's place of business or otherwise.

I suppose the definition of "sell" is what could be called into question here (ie, is the profit I generate a "sale" or not?), but for the very small amount of impact this will have on me and my clients, it's really not worth getting into a battle with the state and I will simply hand over the 6%, which is unlikely to buy more than a couple of cups of coffee for somebody. For a photographer whose business is more about the paper than mine there may be a point to argue, but I'll leave it to them to do so on this occasion :)

I'm just happy to have it worked out (and very pleased this state has implemented an online system, making it MUCH easier to keep track of)

Here's the relevant tax code for anybody who's interested: C. Tangible Personal Property Shipped into this State. In those cases in which tangible personal property is shipped into this State pursuant to a contract of sale, the sale will be considered to be made in this State if both of the following tests are met: (1) The contract of sale is entered into either conditionally or unconditionally in this State by or on account of a nonresident seller who has in this State a place of business from which sales are made or a sales office. (2) The delivery of the tangible personal property is made by the seller to the buyer in this State. Delivery of tangible personal property will be considered as made in this State if either: (a) Physical possession of the tangible personal property is transferred by the seller to the buyer in this State; or (b) The tangible personal property is shipped by the seller from a point outside this State to a buyer in this State either by common carrier or mail, whether the shipment is F.O.B. the seller's place of business or otherwise.

It's really up to you if you to take what ever path you want, but you did ask the question.

If you look at #1, SmugMug, the seller, the one offering the prints, the one invoicing the customer for payment does not have a sales outlet or a place of business in NY.

The sale from SmugMug does meet the criteria of #2.

However by their own tax code The transaction from SmugMug to a client in NY does not meet BOTH #1 and #2.

In ether case YOU are not the entity responsible for sale tax collection or payment.

SmugMug is and they have accountants who know the laws for every state and have been doing this for awhile now.

Sam

Each state is different about when and where to collect the tax. Some states put the onus on where the buyer legally resides, some where the seller legally resides (or in the case of large companies -- office locations) , some where the item is being delivered and some even have reciprocal agreements with other states to collect tax if the company is "delivering" an item to/from their state (example: internet sales). Rightly or wrongly, following what your state workers told you is in your best interest :-). For more details: http://streamlinedsalestax.org/

Interesting timing that this question came up around the time of this announcement: http://abcnews.go.com/Business/amazo...7#.T-9gqJHRook

I didn't read all the responses, but I can tell you that Texas has specified that I must charge sales tax on print sales even if they are handled by a lab that is out of state. Your state may have similar rules. I believe it was extremely easy to set up my pro account to collect the sales tax on my behalf. You might have to know the rate for your area. Smugmug sends me a tax check quarterly that is separate from the profits.