URL: http://www.entrepreneur.com/money/taxcenter/taxessentials/article48292.html

Sales taxes vary by state and are imposed at the retail level. It's important to know the rules in the states and localities where you operate your business because if you're a retailer you must collect state sales tax on each sale you make, says Ralph Anderson, a CPA and small-business tax specialist with accounting firm M.R. Weiser.

Before you open your doors, be sure to register to collect sales tax by applying for a sales permit for each separate place of business you have in the state. A license or permit is important because in some states it's a criminal offense to undertake sales without one. In addition, if you fail to collect sales tax, you can be held liable for the uncollected amount.

If you're an out-of-state retailer, such as a mail-order seller, who ships and sells goods in another state, be careful. In the past, many retailers have not collected sales taxes on the sale of these goods. Anderson advises you to be sure you or your accountant knows the state sales tax requirements where you do business.

Excerpted from Start Your Own Business