My business partner and I have an online clothing business. It is an LLC registered in Anchorage, Alaska. She is based in Texas. We will file for a...

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Hi, give me a moment to provide you with a detailed answer to your question.

Whether or not you are required to collect sales tax on products you sell online boils down to a term called “nexus.”

If you run a business with a physical storefront, collecting sales tax is straightforward. You charge your customers the sales tax required by the state or county where your business is located. For example, if your retail store in located in Atlanta, Georgia, you are required to collect sales tax from customers purchasing items from your store.

But in your case, you sell your products online. Does that mean you charge customers the same sales taxes that you would to customers who purchase items from your brick and mortar store? It depends.

If your business has a physical presence in a state, such as a store, office or warehouse, you must collect applicable sales tax from your customers who you sell to online in those states. If you do not have a presence in a particular state, you are not required to collect sales taxes.

This physical presence is known as a "nexus." Each state defines nexus differently, but all agree that if you have a store or office of some sort, a nexus exists. If you are uncertain whether or not your business qualifies as a physical presence, contact your state's revenue agency. If you do not have a physical presence in a state, you are not required to collect sales taxes from customers in that state.

So if you or your partner has nexus in the states you live, you are required to collect and remit sales tax in that state.

Feel free to ask additional questions. 

If you or your partner have an office in Texas, whether it be an actual office or a home office, you are required to collect sales tax.

If you live in different states, you will be required to collect sales tax in both states.

I am in Georgia.  You will have to contact your states Department of Revenue to find out the sales tax percentage.  You may also have to contact each county to see what their sales tax requirements are because the amount change depending on the county.  

Yes.  You can come back later.  I will be here to help you.

No problem.  I will look out for you.  

Hi.  Go right ahead.

Keep in mind that all 50 states are in charge of making their own rules when it comes to sales tax requirements.  TX may have different filing rules and requirements than Alaska, so it is prudent that you find out the filing rules and requirements for each state you have nexus in.  

In Georgia, we are required to file monthly, quarterly, or annually depending on how much we anticipate on reporting.  There is no hard and fast rule in GA; it varies based on each businesses volume of sales.  That may or may not be the case for TX and AK.  

The little I know about Alaska is that they do not have sales and use tax requirement, but I believe there are some local jurisdictions that impose a local sales tax.  If you think you will be selling in a jurisdiction that imposes local sales tax, you will likely need to collect and remit the tax, but I strongly suggest you contact the municipals taxing authority for clarification and rates.  

You are right about that.  And it gets even worse when you have to deal with varies jurisdictions with different rates.  You'd have to keep track of all the sales for each state/jurisdiction.  It can be a royal pain in the you know what.  

This question is off topic from your main question so I am not really supposed to answer this question, but I will give you a general idea of how LLC's work.

LLC's are governed by the state in which you live.  An LLC with more than one member (you and your partner) will be taxed as a partnership regardless of which box you checked when applying for your EIN.  That being said, if you are a multiple member LLC (an LLC with more than one member) you can call the IRS and inform them that you are now an LLC, but keep in mind you filing requirements will not change, you will still be required to file a partnership return because the LLC is owned by two people.  

If you were switching from a partnership to a single member LLC, the IRS will definitely need to be informed because your filing requirements will change.   Hope my explanation helps.  

No problem.  You are welcome.