Does a montana resident get a sales tax exemption if buying new home furnishings in Arizona?

Question

We are building a home in Az, but are residents of MT, wondering if we are able to be exempt from the 7% sales tax in AZ?

Answer 1

Sales tax is a function of point of sale or bringing something from a state without sales tax to a state with sales tax. So being a MT resident will not exempt you from Az's sales tax. There is an option for federal income tax to use state and local sales tax rather than state and local income tax as a deduction if you itemize. If you select the sales tax option you can use the general sales tax tables or your actual sales tax expenses. All of that said it is very unlikely that you would take this option unless you buy a great deal of furniture or other things subject to sales tax. Normally only things like cars trigger this option.

Answer 2

Montana Sales Tax

Answer 3

Montana has no sales or use tax. If you purchase the furniture and have it shipped from AZ to MT, then there will not be any sales tax on the transaction. Sales made in interstate commerce are not subject to sales tax. They are subject to use tax in the destination state, but since MT has none you would owe no tax. However, if you pick up the furinture and transport it yourself (or hire someone to move it for you), then AZ tax applies because the sale took place in AZ.

Answer 4

One correction to mathew's answer. Bringing an item from another state trigger's a 'use tax', not a sales tax. These are often confused because use tax is nearly always the same rate as sales tax. Most use tax laws offer a credit for the amount of sales tax paid to the state where the sale occurred.

Answer 5

As both said, sales tax only applies if you are buying a mobile home on leased land. In real estate, there is a tax called "Excise Tax", but that is a seller's closing cost, not a buyer's. In Washington, the rate is 1.78% of the sale price, but again, it is paid by the seller not a buyer. The only sales tax you will incur on on the services on your settlement statement, like sales tax on the title insurance policy.

Answer 6

I don't believe there will be a sales tax deduction for 2006. That's the rumor anyway.