With so much business either originating online or migrating there from brick-and-mortar establishments, the possibility of conducting transactions via the Internet is opening up a whole new world for entrepreneurs and business owners on a global scale.

Whether you’re selling products or services, having the ability to sell your goods online makes it possible to expand your potential customer base in ways that would have been unimaginable not too many years ago.

But the rapid and expansive development of e-commerce has also resulted in a situation in which certain key aspects of doing business—like dealing with taxation, protecting customer data and establishing corporate liability—have become more complicated, largely due to the fact that state, federal and territorial laws are not always consistent. Additionally, there’s a lag between the realities of e-commerce, determining how existing laws apply to online businesses and actually changing those existing laws to account for new developments in technology and common practice.

All told, the legal side of e-commerce is complex and in seemingly constant flux. However, here are a few things you should know about if your business sells products or services online:

• Taxes: In the tax realm, there are two key things to be aware of: income tax and sales tax. Your business must pay income tax on all sales conducted via the Internet, regardless of the buyer’s location. Sales tax is a bit trickier. If you have a physical location in a particular state and a resident of that state makes a purchase, you should charge sales tax. In theory, out-of-state customers should also pay sales tax, but this is rarely enforced.
• Customer data: Any time your company conducts a transaction online, you end up with valuable customer information, including names, addresses, phone numbers and credit or debit card numbers. It’s your company’s responsibility to safeguard this information against hackers, and to protect it from unlawful use by your own employees.
• Liability: A security breach is not something any company wants to experience, as it betrays the trust of their customers and requires rebuilding the brand’s reputation. In the event that a data breach does occur, your company is responsible for disclosing it to your customers. Failure to do so can result in serious legal consequences, not to mention bad press and damage to your company’s good name.

Ultimately, while the rise of e-commerce is good for countless types of businesses, it can be quite confusing for business owners to know what they need to do to stay on the right side of the law, as well as how to do it. If you have questions about the laws related to your business’ online sales, speaking with a knowledgeable attorney focused on e-commerce is the best way to get the information and assurance you need.  Attorneys at BoltNagi not only have experience with ecommerce law, but with running ecommerce websites themselves.

BoltNagi is a widely respected and established business and corporate law firm proudly serving clients throughout the U.S. Virgin Islands.