Does sales tax apply to people from states that don't apply sales tax?

Question

I live in NH and am interested in a vehicle in Massacusetts. An ad on the listing says "no sales tax to out of state buyers". Is that true?

Answer 1

Victor is partially right, and partially wrong.

Normally, if you walk into a store in Massachusetts and purchase something subject to sales tax, you will be charged sales tax. If you order something online and it is shipped to you, it is subject to the sales tax laws in your state, PROVIDED that the business you are ordering from has a taxable business presence in your state. With automobiles, that is a slightly different story. Sales tax is due upon registering the vehicle. So sales tax is assessed based on where the car is registered.

You need to keep in mind though, that if you purchase a car from out of state, the dealer may not necessarily charge you sales tax when you purchase the car, but you may still need to pay sales tax when you register the car in your home state if your state charges sales tax.

For example, the state of California will require payment of California sales tax when a car purchased out-of-state is registered for the first time in California. If you purchased the car in a different state, and the dealer did collect that state's sales tax, you can claim the credit against the California sales tax due. So, if the California sales tax rate is 8%, and you paid 6% to another state when you purchased the car, California will require that you pay 2% when you register the car in California. You can be exempt from paying the California sales tax ONLY if you have already owned the car for 1 year when you go to register the car in California.

Answer 2

Yes that is true. Sales tax is due to the state where you will use the item, in this case NH. If NH has no sales tax, then you don't pay any. If you buy a car in Ma. and live in a state with sales tax you do not pay Ma tax, but tax to the state where you live.

Answer 3

Check and see if MA offers a trip permit.

Some states will allow you to buy a vehicle you will register in another state without paying the sales tax. They require you to get a trip permit instead of a temporary license. The permit gives you so many days to get the car out of the selling state without incurring that state's sales tax.

Answer 4

I can't tell you the particulars here. I would like to warn you to check with NH and MASS - they'll have state websites that lead to their tax departments and you can email the right people. ABSOLUTELY do not depend on the word of the seller! It's pretty unheard of for a state with sales tax to exempt any purchase of a large item for out-of-state buyers. They have a chance to snatch a thousand dollars of your money and they just give it up? There could be a reciprocal agreement with NH that MASS citizens have to pay MASS sales tax even on car purchases in NH, and in exchange, MASS gives up the sales tax on NH citizens buying in MASS. It might make sense to MASS if, in the past, they have seen more cars bought out of state than they saw out of state people coming to MASS to buy cars. Seems unlikely but... Check the two states' websites for state tax people to email. They will happily answer and with a more likely to be correct answer than a car dealer wanting another sale can be trusted to give.

Answer 5

YEs, sales tax applies to all items that are sold in the state that has the tax. There are exceptions, like in Virginia we don't tax medicines, and have a lower tax on food, but still it all applies to items sold in the state.

Answer 6

yes.... because when your in another state you must follow there laws and rules.