How does the taxation of e-commerce work?

Taxation of e-commerce in North Carolina works similarly to taxation of other businesses. Generally, businesses registered in North Carolina are required to collect and pay sales tax from customers on taxable sales. When it comes to e-commerce, 3 types of taxes may apply: sales tax, use tax, and the business privilege tax. Sales tax is a tax imposed on the sale of goods or services. In North Carolina, the sales tax rate can vary according to the county in which the goods are being sold. The rate could be anywhere from 2.5% to 7%. Use tax is similar to sales tax in that it is a tax imposed on the purchase of goods or services. However, it is different in that it applies to purchases made out of state or from out of state vendors. This tax rate matches the sales tax rate for the same county. Finally, the business privilege tax is imposed on businesses operating in or selling to customers in the state. This tax is paid annually to the state and is based on the revenue of the business. In short, taxation of e-commerce in North Carolina takes into account the same taxes as any other business, but differentiates between in-state and out-of-state purchases. It is important to familiarize oneself with both state and local taxation laws when selling goods and services.

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How does the taxation of e-commerce work?

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