Online Taxes

Small merchants and individuals who sell online will most certainly come across an unpleasant reality sooner or later: the need to provide their taxpayer ID (a social security number or EIN) to any entity that processes payments on their behalf. That's because companies that process credit and debit cards as well as third-party network payments such as Etsy, PayPal and Amazon.com are required to report to merchants and to the IRS the gross amount of the transactions they've processed. 

The days of tax-free purchases from Amazon.com are coming to an end for Tennessee customers. WPLN Nashville Public Radio reports that the online retail giant will begin charging the Tennessee sales tax on Jan. 1, in keeping with a previous agreement with the state.

As every business owner knows, it's important to comply with local, state and federal tax laws. But compliance can be a challenge. It's not always easy to figure out what taxes are owed on which items, even if you sell goods in one state only. If you operate in multiple states, that can complicate matters exponentially. Tax rates and taxable item categories can vary considerably from state to state. Cities can also impose their own taxes on certain items and services. And sometimes, tax regulations just don't make much sense, which leads to confusion for business owners who are struggling to accurately collect taxes from customers. Here are seven examples of bizarre taxes found in states: