I have a Delaware LLC and recently moved to FL. Do I need to collect sales tax for my internet advertising biz?

Whether you need to collect Florida sales tax depends on two things:

1. Where are you located?
2. Where are your customers are both located.

So, in general, you will not have to collect sales tax on internet advertising services unless your customer is physically present or located in the same state as your business (i.e., Florida or Delaware). I assume, Florida will assert that you are located and are physically present within Florida for tax purposes. While your business is incorporated in Delaware, you are physically present in Florida, and I assume you run your business from your Florida home. This should be enough to be a presence in Florida.

Florida has a very broad view of what constitutes a physical presence in Florida and will impose its sales (and income) tax on a business and the services it offers even when there is no office, salespeople, warehouse, store or other physical presence within the state. Florida only requires that a business has some activity within the State and income is derived from or attributable to sources within Florida, including income from intangible property located or having a situs in Florida (i.e., services over the internet that you provide from a computer and/or server located in Florida).

Trying to figure out a customer's location and whether they are present in Florida (or Delaware) may not be so simple. You are correct in assuming that even when your business may not collect a sales tax, the customer are generally responsible for remitting any unpaid use tax on online purchases directly to their state. However, if a customer has any activities that derive income from Florida, technically speaking, the customer is also considered "physically present" in Florida. So, there is a risk that Florida may pursue the portion of your business sold to customers who are physically present in Florida. However, there are several exemptions from sales taxes for advertising services. If you qualify as an "advertising agency" or provide "advertising services" (see https://taxlaw.state.fl.us/view.aspx?id=700493&file=sut_fc&format=1&banner=Sales And Use Tax - Florida Administrative Code) - you would be exempt from sales tax for most of your services (within Florida) in any event. Additionally any "promotional materials" you export from Florida are also exempt from sales tax - see https://taxlaw.state.fl.us/view.aspx?id=403902&file=sut_fc&format=1&banner=Sales And Use Tax - Florida Administrative Code). So, even when a customer is "physically present" in Florida, one could argue that the vast majority of the advertising is "exported" from Florida and that portion is not subject to sales tax.

With respect to Delaware, currently, Delaware does not impose a sales tax, but it does impose an annual license fee and monthly gross receipts tax on receipts in excess of $50,000 per month at .384% rate on radio and televison advertising services.

This answer is for informational purposes only and is not intended to provide legal advice or create an attorney-client relationship. Please consult with a local business attorney who is experienced with sales tax issues for legal advice that is tailored to your particular circumstances and facts. Good luck to you.