Just trying to find information on eBay about collecting sales tax is not easy. I couldn't find a discussion board for sales tax. There is a Seller Central Discussion Board, but no apparent way to search it. On the Checkout discussion board, I finally found some mentions of sales tax. Small sellers were (unofficially) advised to "contact the Department of Taxation and Finance for your state."

We have been collecting sales tax all along at our micro business, largely because we started as a real-world operation and we are a bonafide S Corporation. We're located in Florida, and as best I can tell, we are required to collect and pay to the state sales taxes on our online sales made to customers in Florida. But only in Florida.

Heard in the Forum I'm confused. I live in Ohio and all my customer's nexus' are in Ohio, too. So I only have to charge sales tax to customers in Ohio and not anywhere else? Am I missing anything? What do I need to do to not to get sued? Reply at the E-Commerce Forum.

In general, e-commerce businesses (and any business doing any portion of its sales on the Internet) currently are required to charge sales tax only on purchases made by in-state customers.

That's exactly what we do, and once a month I add up our in-state Internet sales, figure the tax and include it in our overall payment to the state revenue department. For the month of January, about 9 percent of our e-commerce sales were inside Florida. About 25 percent of our overall sales were made on the Internet.

Who's Taxing Who and for How Much?
Even though that sounds simple, it raises questions — such as which sales tax rate to charge, since in Florida the rates vary by county. We decided to charge the rate for the county in which our business is located. It falls somewhere in the middle. There really is no way for us to slice this pie in increments of one half or one quarter of one percent, depending on what each particular local government has decided to add on to the state's base rate.

That variation by county, city, township, even local flood control districts with taxing powers, is what makes collection of sales taxes over the Net so complicated. Simplifying the process is the aim of the Stream Lined Sales Tax Project.

But complicated or not, sooner or later most merchants doing business online will collect sales taxes on just about all transactions. It's going to happen.

Congress Takes Control (or Talks About It)
There is legislation pending in Congress now that would authorize states to require sales tax collection on Internet purchases, provided those states adopt the simplified sales tax regulations.

But the good news is that most micro and small business merchants with less than $5 million in online-generated sales would be exempt, so this is not something most small eBay sellers need to worry about soon.

Meanwhile, my state revenue department, in what I think is an amazing display of optimism, says this on its Web site:

"Generally, merchandise purchased out-of-state is subject to tax when brought into Florida untaxed or if the tax rate paid was less than six percent. This 'use tax,' as it is commonly called, complements the state sales tax. Use tax applies to untaxed items purchased out-of-state from sources such as 7 Internet sites, 7 mail order catalogs, 7 television shopping networks, 7 auctions, or 7 toll-free (1-800) shopping services. If the seller does not collect the tax, or collects it at a rate less than six percent, the purchaser is responsible for paying it directly to the Florida Department of Revenue."

I suspect they are somewhat underwhelmed by the number of consumers voluntarily sending them tax money.

Still, a number of national major e-tailers already are charging sales tax on almost all online purchases — in theory giving us little guys and eBayers an advantage.

And some eBay operations from the big boys, like Dell Computer, charge sales tax to customers who live in states where Dell has a physical presence, or "nexus," as it's called. Of course, there is no explanation for the poor consumer. Dell simply says that "Applicable sales tax is charged on the total invoice amount for items shipped to CA, FL, ID, IL, KY, MO, NC, NV, OH, PA, TN, TX, and VA."

States Claim Online Sales Unfair
The push for national sales tax collection on Web transactions is coming from cash-strapped state governments, using the argument that untaxed online sales are creating an unfair advantage for Web retailers over brick-and-mortar merchandisers.

The National Retail Federation (NRF) says that state legislatures around the nation are passing bills to comply with a multi-state agreement that "could lead to a level playing field for sales tax collection."

The NRF believes "remote sellers" have an unfair price advantage in situations where they are not required to collect sales tax, and that all retailers should play by the same tax rules.

I don't like it much, but I think they are right.

"The federal legislation that was introduced in both the House and Senate last fall is still pending, the states are still working on streamlining their sales tax laws, it's all moving along," said J. Craig Shearman. vice president for government affairs public relations at the NRF.

"The last count I had was about 20 states have passed such legislation," he said. However, so far there has been no substantive action on the measure in Congress, Shearman said, adding that "we certainly expect it will go through, there is a lot of backing from state legislatures in a bind for tax revenue."

The $5 Million Dollar Mark
The good news for small businesses, especially those with a large brick-and-mortar component, is that the proposed sales tax collection measure will not kick in until after $5 million in online sales. "It's not cumulative with your off-sales," Shearman said.

That means you can be selling $10 million annually off-line, and $4 million online, and not have to worry about sales taxes on the $4 million — except for those sales made to customers in your home state.

So for now, the bottom line for small businesses selling on eBay or via a Web site seems to be this: If the state where your business is located requires merchants to collect and remit sales taxes, you need do so only for your in-state Internet customers.

Still, collecting sales taxes nationwide is one headache I would love to have — because it means we'd be doing $5 million annually online.