Sales Tax

Why it is Collected

Most people feel if you do not have a physical storefront in a state, the customer does not have to pay sales tax. That is why so many people feel that when they order online, their internet purchase won't charge sales tax. Unfortunately, nothing is ever that simple! That is why our government, through its due process and commerce clauses came up with what is known as a "nexus"!

In legal terms, a business that has a physical presence, outside the obvious of a storefront, warehouse, or office, within a state is referred to as a "nexus". In other words, a "nexus" refers to individuals who are engaged in business within your state by independent distributors or agents. Independent distributors or agents, have a significant presence within a state, therefore, sales tax must be collected and submitted to that state.

HTE has Independent Distributors located throughout all 50 states in the USA and are required to collect and submit sales tax to all states who collect sales tax. Currently, Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge sales tax, so those states are exempt.

Sales tax rates vary by state, some states charge 4%, while others up to 10%. Most states are between 6% to 7%.

I hope that clarifies things, if it does not, you can view more information on what a "nexus" is.