Unfortunately there is no easy answer here, every state is different as far as their requirements. Hopefully I can clarify a lot of misconceptions though:

Sales tax has been around for many many years. It was originally designed to tax retail stores for locally sold products. Originally it was a simple system because everyone would buy from their local store.

Interstate sales started occurring more regular with mail order, then it exploded when eCommerce started making its mark.

Since that time states STILL do not have a solution for interstate commerce, which means sales made to someone who lives outside of the state where you live is not subject to paying sales tax on their purchase.

With that historical background out of the way, the simplest answer I could give is that most likely your state only requires sales tax to be paid if you ship a kickstarter reward to someone WITHIN your state. With that being said, your state may have specific rules that may need to be followed, that’s why it is important to talk to a professional who can look up those rules for you.

Here in California, you are only required to pay sales tax on products shipped inside the state. In addition to that, there is also a district tax for specific areas within California. For Example, if you live in Sacramento, and you ship a kickstarter reward inside Sacramento, then you will have to pay a district tax on that item as well as the state sales tax.

The absolute best way that you can approach this is to incorporate your business in a state that does not have sales tax, such as Delaware, then distribute (ship) your kickstarter rewards and products from a state that ALSO does not have sales tax. This way you can typically avoid that altogether. This would only be necessary if you feel a lot of your backers will happen from the state that you live in.

Typically, if you do conduct a successful kickstarter, and you do ship products inside a state that has sales tax laws, you must pay sales tax on those items. The same goes with intangibles, such as video game sales.

Again, these rules vary state by state, so you may need to consult a professional.

Again, this article is only meant as informational, many individuals and companies have unique situations, I recommend you consult a professional before applying any of the above information.

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