The sales tax on internet purchases, is it according to where you live or where their store is located?

Question

I moved to Canada recently, but my bank's address is still in Texas, and I'm getting a UPS mailbox in Upper New York in order to be able to receive merchandise they won't deliver to Canada.

I'm wondering if I should keep my Texas address or give the bank the UPS store address, as the sales tax in NY is considerably higher than that in Texas.

I'm confused and I would appreciate an answer.

Answer 1

Sales tax is based on the "ship to" address. Since you can't very easily have your items shipped to your bank, getting a box in New York to receive your items is the way to go.

As for the suggestion that you don't owe tax if you're in another state, that is patently FALSE! The vendor is not required to collect tax from you if they do not have a presence in the state they are shipping to, however, the person receiving the goods would then be liable for USE TAX No matter how you slice it, the end user is always responsible for paying the tax on the items they buy unless they are exempt or there is no sales tax in there state.

Granted, an occasional sale/purchase isn't worth anyone's time to pursue, but be aware that tax is owed and in my job we're working on keeping some people out of jail for not paying tax on items they had shipped to their state where the vendor did not collect the tax.

Answer 2

If the retailer is in your state, they will likely collect sales tax for you.

Otherwise, some states (like where I live - Ohio), require you to pay sales tax (called use tax in this case) to them directly at the end of the year. The rule here is that if the retailer charged you sales tax for ANY state at all, then you don't have to pay it again to Ohio. But, if the retailer did not charge you any tax at all, then you must pay it yourself to your state of residence.

You should note, however, that some items aren't taxable and this gets pretty complicated. Also, this is somewhat on the honor system since I'm not sure if they "know" how many internet purchases you make in a year.

I don't know about Canada, but if you buy things from the U.S. you might owe some kind of import tariff.

Answer 3

The sales tax is only paid by the buyer if he lives in the same state as the seller. On large items (car) you will need to pay the tax when you do your income tax.

Answer 4

It depends on the state. Some states tax internet sales, some do not. In MA, there is now a tax on internet sales regardless of where the seller is.

Answer 5

misslabeled is correct for US sales. Living in Canada may be a complication here. Does Canada or the province you live in have a use tax?

Answer 6

firms are required to collect sales tax when the transaction occurs where the business has a presence such as a retail outlet, call center, service center, etc.