The truth about taxes There are plenty of taxes already being applied to Internet sales. Sales taxes commonly apply to an online merchant located in a state with a sales tax that's selling to a consumer in the same state. As a rule, taxes on online sales don't cross state lines. The Internet Tax Freedom Act was approved last year to provide a moratorium on new or discriminatory taxes placed on the Internet. It's usually voluntary and rarely enforced.
Some states seem to think so.
Texas, for example, has tried unsuccessfully to apply this tax. A physical facility, such as a store, distribution center or sales office, is usually enough to create a physical presence that kicks in sales taxes. But such laws are not so easily defined on the Internet. Another provision of the Internet Tax Freedom Act said that having your Web page on a server in a state does not create a physical presence in that state. An agent, in regular business, is a contractor or company devoted to selling a company's products, thus opening it to taxes.