Celtic Knotwork Designs
Sales Tax Policy
Gone are the days when you can make purchases online without having to pay sales tax. Except for when you lived within the same state or local area of the website owner(s).
You can thank the U.S. Supreme Court for that and their decision in the case of South Dakota v. Wayfair. The U.S. Supreme Court decided that a business no longer needs to have a physical presence in a state to collect and remit sales tax to the state.
All they have to do is sell merchandise to the residents of the state. This creates what they are now calling an economic nexus.
The taxing of Internet sales is not limited to the United States, many other countries are starting to do the same.
For the purpose of this Sales Tax Policy all add on and included in the price taxes regardless of what they are called locally (sales tax, gross receipt tax, value added tax, etc.) are referred to as Sales Tax.
Sales Tax and Tax Rates
We will be charging sales tax on any sale to an area (state, city, country, etc.) that currently imposes sales tax on Internet sales and / or sales where we meet their economic nexus.
The rate of sales tax charged will be in accordance with the local taxing authority of the sale's destination and the most recent published sales tax rate of that taxing authority.
A list of those sales tax rates will not be published here because there are too many taxing authorities, over 13,000 in the U.S. alone.
Sales Tax Destinations
We are currently limiting selling / shipping of our products to the United States. We reserve the right to refuse to sell to any state, county, local area (city, town, village, etc.) that makes this issue of sales tax more difficult then it already is.
We will expand sales to other countries as we gain a better understanding of the economic and taxing landscape of that country. For more information see our Shipping Policy.
Live Outside of the United States?
We will be expanding our sales and shipping areas outside of the United States soon. It will be a gradual expansion, selecting and expanding to one country at a time.
We will base this expansion on three key factors.
- Countries people are visiting this site from.
- The Internet taxation laws in affect and / or pending in those countries.
- Countries that subscribers to the Celtic News Newsletter reside in.
The item above that holds the most weight in our decision to expand to other countries is where members of our newsletter reside.
If we have 1000 visitors from the UK but 1 Celtic News Newsletter subscriber in Canada, we'll expand to Canada before expanding to the UK.
If you live outside the United States and would like to see us expand our sales and shipping to your country then be sure to subscribe to the Celtic News Newsletter.
Internet Sales Tax
| State | Tax Internet Sales | Sales Tax Charged |
|---|---|---|
| Alabama | Yes | Not at this time |
| Alaska | Yes | Soon |
| Arizona | Yes | Not at this time |
| Arkansas | Yes | Soon |
| California | Yes | Not at this time |
| Colorado | Yes | Not at this time |
| Connecticut | Yes | Not at this time |
| Delaware | No | No |
| Florida | Yes | Not at this time |
| Georgia | Yes | Soon |
| Hawaii | Yes | Soon |
| Idaho | Yes | Not at this time |
| Illinois | Yes | Soon |
| Indiana | Yes | Soon |
| Iowa | Yes | Not at this time |
| Kansas | Yes | Not at this time |
| Kentucky | Yes | Soon |
| Louisiana | Yes | Soon |
| Maine | Yes | Soon |
| Maryland | Yes | Soon |
| Massachusetts | Yes | Not at this time |
| Michigan | Yes | Soon |
| Minnesota | Yes | Soon |
| Mississippi | Yes | Not at this time |
| Missouri | No | No |
| Montana | No | No |
| Nebraska | Yes | Soon |
| Nevada | Yes | Soon |
| New Hampshire | No | No |
| New Jersey | Yes | Soon |
| New Mexico | Yes | Yes |
| New York | Yes | Soon |
| North Carolina | Yes | Soon |
| North Dakota | Yes | Not at this time |
| Ohio | Yes | Soon |
| Oklahoma | Yes | Not at this time |
| Oregon | No | No |
| Pennsylvania | Yes | Not at this time |
| Rhode Island | Yes | Soon |
| South Carolina | Yes | Not at this time |
| South Dakota | Yes | Soon |
| Tennessee | Yes | Not at this time |
| Texas | Yes | Not at this time |
| Utah | Yes | Soon |
| Vermont | Yes | Soon |
| Virginia | Yes | Soon |
| Washington | Yes | Not at this time |
| West Virginia | Yes | Soon |
| Wisconsin | Yes | Not at this time |
| Wyoming | Yes | Soon |
| Other U.S. Areas | Tax Internet Sales | Sales Tax Charged |
| Washington D.C. | Yes | Soon |
As you can see almost all of the states and U.S. holdings (Washington D.C.) have jumped onto the taxing Internet sales band wagon.
There is only one state that we should be collecting sales tax for, New Mexico because we have a physical presence in the state.
All of the states that show "Not at this time" in the Sales Tax Charged column have what is called a "Safe harbor for small businesses" clause. And it will be a while before we will meet the economic nexus requirements of the state and have to start charging sales tax on sales to those states.
The rest of the states and holdings that are taxing Internet sales claim to have a "Safe harbor for small businesses" clause. But in addition to the $100,000 (or more) in sales within the state for their economic nexus they also have a second stipulation of 200 transactions or like New York stipulates only 100 transactions.
This 100 or 200 transactions stipulation can be used by the states and holdings to go after the small businesses despite the so called safe harbor clause. After all 200 transactions is 200 transactions regardless of the total sales value.
For example 200 sales of a $5 item totals only $1000, an amount way below the $100,000 (or more) economic nexus threshold, but if the state chooses to enforce the 200 transactions rule those sales are taxable regardless of the total economic nexus. Or in the case of New York that threshold could be as little as $500.
The so called safe harbor can end up being very shallow.
If a small business does not collect and remit sales taxes after passing the 100 to 200 transaction threshold they can be heavily fined by the state. At least one state has already started going after businesses selling products into the state that are below the $100,000 economic nexus.
All of the states and holdings that have this 100 or 200 transaction stipulation and can potentially violate the so called safe harbor for small business clause show "Soon" in the Sales Tax Charged column in the table above.
The reason for this is that as soon as we cross the 100 or 200 transactions into the state threshold we will begin charging sales tax. Or we may block sales to those states until the economic nexus period resets.
In recent months several states have recognized the potential abuse of the 100 or 200 transactions stipulation and have removed it from their economic nexus description.
In 2019 only two of the states had "Not at this time" listed in the Sales Tax Charged column. Now there are 19 states with true safe harbor for small business clauses.
What This Means to You
Residents of the state of New Mexico will have sales tax added to their purchases.
We will charge sales tax on sales to the states and holdings that continue to stipulate 100 or 200 transactions as "Soon" as we reach this threshold. Or we may stop selling to those states until the economic nexus period resets.
We will charge sales tax on sales to any state or holding that we meet the economic nexus, their status in the table above will be changed to reflect this. For more information see the table above.
As more states drop the 100 or 200 transactions stipulation you will be able to purchase more online from small businesses like us without having to pay sales tax.
