The steps to start internet businesses are the same as for starting any business. However, doing internet business involves additional considerations of legal and financial nature, particularly in the areas related to privacy, security, copyright and taxes.
The rules and regulations to conduct electronic commerce apply mainly to retailers and other companies on the internet transacting with consumers to collect customer data. However, though not sell anything online, the laws covering digital rights and Internet advertising can still apply to you.
The Federal Trade Commission (FTC) is the main federal agency that regulates the activities of electronic commerce, including the use of commercial e-mails, online advertising and consumer privacy. Intenet Marketing and Advertising FTC provides a summary of the rules and regulations on electronic commerce.
The following topics provide additional information on how to comply with laws and regulations related to electronic commerce.
Meet the necessary steps you should take to protect your customers against identity theft and other unlawful uses of personal information. Any company that collects personal or financial information either through online sales, reports or credit applications, you must understand these rules and regulations.
If you have a business with a physical space, collect the sales tax is fairly straightforward: you charge your customers the sales tax required by the jurisdiction where your company is located. For example, if you have a retail store in Brooklyn, New York, cobras taxes on both state and local sales to customers who buy merchandise in your store.
But suppose you start to sell your products online. Does it mean that charged the same taxes to sales if customers enter the store? It depends.
If your company has a physical presence in a state such as a shop, office or warehouse, you must charge your customers tax state and local sales applicable. If you do not have a presence in a particular state, it is not necessary that you charge sales taxes. In legal terms, this physical presence is known as “nexus”. Each state defines the connection differently, but all agree that if you have a store or office of some kind, there is a link. If you’re not sure if your company qualifies as physical presence, contact the tax collection agency in the state. If you do not have a physical presence in a state, it is not necessary that you charge customers sales taxes in that state.
This rule is based on a ruling of the Supreme Court 1992 (Quill v. North Dakota, 504 US 298 (1992) in which the judges ruled that states can not require companies catalog sales, and by extension retailers on the internet, they charge sales taxes unless they have a physical presence in the state. the Court based its decision to force sellers to meet with more than 7,500 taxing jurisdictions was too complex for them to handle vendors and impose a strain on interstate commerce.
Note that not all states or localities have sales tax. Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon have no sales tax. In addition, most states have tax exemptions on certain items, such as food or clothing. If you’re charging the sales tax, you should familiarize yourself with the applicable fees.
It can be a challenge to determine which sales tax receivables. Many retailers use internet services shopping cart to handle sales transactions. Several of these services are programmed to calculate rates of sales tax.
Personal data is not all that is protected on the Internet. Digital works, including text, movies, music and art are protected by copyright and by the Law on Copyright Digital Millennium (DMCA). The DMCA provides a number of protections for information on the Internet, and other forms of electronic information. Among many more provisions, the DMCA