Yes, e-book sales are taxable, and you should register with the taxing authorities in your city, county, state, etc.
For example, I'm in Tucson, Arizona. My e-book sales within the city limits are subject to a city sales tax and the state sales tax. Total amount of tax: 7.6%. Sales outside of Tucson, but within the state of Arizona are subject to the state sales tax. Total amount of tax: 5.6%
So, where do you go to register with the taxing authorities? Well, if you were in Tucson, you'd go to both the city and state Departments of Revenue. You'd be looking for the business privilege licensing application.
One more fun fact: While many online shopping carts allow for the addition of a sales tax for purchases within a state or province, I have yet to see one that allows for the second level of calculation at the city level.
Which means that if your city has a sales tax like mine does, you'll have to pay that tax out of your profits. (Isn't that grand?)
Martha Retallick
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