Say Company A in California sells to Company C in Florida. Company A buys product from Company B in New York and asks them to drop ship to Company C in Florida.
In this situation Company B is coming back to their Customer A and saying that they must charge sales tax unless they get a Florida sales tax certificate for Company C. Is it right that Company B has liability for the tax based on shipping address alone, and not on the billing address?
This situation is ripe with opportunity for other problems. Imagine a case where Company C was an end user who needed to be charged tax. Company B under their proposal would end up charging the tax to Company A, who is not based in Florida. Company A could not pass that tax to Company C because Company A has no nexus in Florida and does not file sales tax returns there. Company C could well end up declaring the item with Use Tax because its invoice from A has no sales tax. You end up with the tax being paid twice (by A and C) and A ends up not able to pass on that added expense.
Is there a way to reconcile this with Company B's requirements?