Mr. W.

When I travel, I often have purchases shipped back to me, and the trade-off is sales tax vs. shipping costs - in other words, I avoid the sales tax but pay the shipping. Doesn't the same trade-off apply to mail-ordered purchases? I'm arguing with a Mass. business on this - they have no branch in my home state but they want to send my order with Mass. sales tax AND shipping tacked on. Is there a difference between purchasing something in person during your travels and having it shipped vs. calling from your home and having it shipped?

Lori

I am in agreement with you. As long as the company you are buying from doesn't have a location in the state in which you live, there should be no sales tax charged on the item. I purchase things like this all the time. Although I don't know where you can find proof of this "no tax" benefit.

Dick

I think, if anything, the hassle would be when you're buying in person - I gather the MA business wants to charge you the sales tax on a mail order. If so, and they truly have no branch or other affiliated business in your state, I think they're wrong. I've never payed sales tax on a mail order under those circumstances.

Sorry

The criteria for sales tax is based on a "business presence" in your state, not necessarily a store, so if the company has any corporate offices or , perhaps is incorporated in, your state, you are still liable. Also, techically, you may required to pay a use tax to your home state even if you actually go and purchase the item in another state and bring it back yourself --this falls into the category of 'rarely enforced' laws, but a few years ago NY state was getting annoyed at all the people going to NJ to shop and tried to publicize the requirement to pay NYS use tax on things bought from other states. Apparently that even applies to the difference in sales tax (e.g. if NJ is 7% and NYS 8% (yes, I know those aren't the real numbers, just an example) you are required to ante up the 1% to NYS)
SO... I guess there may not be much arguing you can legitimately do with your company in question. Just because the vast majority of companies do not want to get involved in the business of collecting sales taxes for other states, I believe they would just be enforcing the law

Not.ATaxLawyer

That Mass. business may have been burned before. States starved for tax revenues are aggressively pursuing out-of-state businesses who ship products into their state (even if they have absolutely no other presence in that state), arguing that shipping into the state creates a "nexus" that allows them to impose the tax. Even if the taxing state is DEAD wrong, the merchant may find it easier to just collect and pay over the tax than fight about it.

Also, the previous poster is right; even if you don't pay sales tax on shipped goods, you still may techically owe a use tax when you get the goods home. While this is a rarely enforced law, some states (e.g. MD) are starting to crack down on this. For example, those roadside sellers of NC furniture are being pursued.

sorry2

Sorry is sorta right, and sorta wrong, about the "business presence" thing. The company might have, for instance, a warehouse in your state, and that means you have to pay sales tax. HOWEVER, the tax is at the rate paid in your state, not the company's. So, in the case you mention, if they have a business presence in your state, they're supposed to charge you for your state's sales tax, not Mass.'s.

Any rules about trying to collect sales tax on consumer purchases from another state -- as in the NY/NJ case -- are pretty much pointless, unless one of the states stations state cops at the border to check every car for a color TV purchased in the neighboring state.

phil

Do you have the ability to order off the internet from them? I might be wrong about this, but I think internet purchases are excluded from sales tax.

Sorry1

Thanks, Sorry2 for clarifying. I did of course mean that you had to pay YOUR states tax rate, not that of the stores. I guess I din't notice that detail of the original question. As far as that enforcement issue, believe it or not, there are actually legal notices posted in many garages (both commercial pay garages and apartment building garages) that note that according to NYS law, law enforcement officals have the right to enter the premises for, among other things, enforcement of tax laws (sorry I don't have the exact wording, but it's a hoot!). When NYS stared to try to crack down a few years ago, apparently, with the help of NJ officals, they were checking records of stores that were shipping or delivering merchandise across state lines. They seemed to be focusing on electronics stores (e. buy a TV and save 6-8%) and other big ticket items. There was always a hint that only purchases above a certain amount would trigger this kind of scrutiny, but of course the exact number was ever revealed.

Patrick

Phil, I don't buy a lot off the internet, but I can't recall a single thing I have bought on the internet which didn't include sales tax. Yesterday I downloaded a McAfee virus scan and was even charged sales tax on that!

sorry2

I used to work in Internet retailing, and the business-presence rule applies the same as for a catalog order.

That's why Amazon put its warehouses in Nevada and Delaware -- neither state has sales tax, so Amazon doesn't have to deal with the business-presence rule. If there's no sales tax, then there's no sales tax to collect.

I've ordered plenty over the Net, and can't remember ever being hit with sales tax. Sorry, can't explain the McAfee thing.

sorry2

Forgot something. Mr. W. asked if there was a diff between mail order and ordering at the store to have it shipped to another state. Yes, there is, but again the tax in your home state applies, not the tax where the purchase is made.

So, for instance, if you buy a refrigerator in Delaware and they deliver it to your home in Pennsylvania, the merchant is obligated to charge PA sales tax. If, however, you take the refrigerator and plop it into the back of your pickup and drive away with it, there's no tax charged.

sorry1

For those who are truly interested (and this may or may not include Mr. W) here are some interesting articles clarifying what is or isn't really taxable:
http://www.ecommercetimes.com/perl/story/4660.html

http://www.nolo.com/encyclopedia/articles/ilaw/internet_tax.html
(and from Amazon.com, a long list of which items are taxable in which state!
http://www.amazon.com/exec/obidos/tg/browse/-/468512/ref%3Dbr%5Fbx%5Fc%5F2%5F6/002-2286300-1608016)
-Naomi

Kevin

In Virginia, the rule is if you're a resident of Virginia, you are supposed to pay 4.5% sales and use tax on everything you buy which you bring home to Virginia. Technically, I'm supposed to accrue taxes on items I purchase over the Internet, and send that 4.5% to the state every month or so. And if they wanted to, the state could audit my purchases, make me pay the tax, and fine me. But there's very little enforcement on individual purchases, so there's not much point.

At my company, however, we are audited every 2 years for state sales and use tax, and we do pay up every month (but we still end up missing things and getting fined).

Patrick

I just checked a couple of my records. I ordered some bed sheets from Company Story on the internet and an out of print book from Barnes & Noble on the internet. Both had sales tax.

Annie

Most catalogs will say "if the items is shipped to _____fill in the state than you have to pay that tax." I usually find that most catalog and internet orders will not charge sales tax to NY. NY is one of those states that require sales tax to be paid on the item you bought AND the shipping charge.
Makes me look twice at the catalog or website before I order!

njgirl

Annie-me too!! By the time I pay for shipping and tax, I could have bought one more item! The worst was the JJILL catalogue,I bought 3 things,smallest sizes.Cost $17-in shipping, nothing fit.Sent it back, cost another $17 in shipping.Never again~