Why isn't sales tax collected for out of state purchases over the internet?

Question

I have always wondered this. What difference does it make if the item is being shipped out of state? It just makes processing online orders a nightmare.

Answer 1

it is the responsibility of the buyer to pay sales tax to their home state when making an internet purchase. very few people ever do and believe me, the state revenue departments have noticed. We will see periodic attempts by states to find ways to get paid for sales taxes from the internet sellers, but they do have a significant problem to overcome as its enough of a margin to induce sellers to move their locations to places where states can't get at them

Answer 2

It would be more of a nightmare if you had to charge the tax, since there are different rates depending on the state and sometimes the location within the state (city or county). Then taxes would have to be remitted to each state.

Sales tax by law is only charged on purchases within the state. Many states have a "use tax" which means that the PUrCHASER is responsible for paying the sales tax equivalent on their purchase directly to the state. Except for cars, which are assessed the tax when they are registered in the purchaser's state, and large cigarette purchases from out of state, which some states have started tracking down and cracking down on, the use tax laws are widely ignored - many people don't even know about them.

Answer 3

Because of several reasons:

1) sales tax is a city or state tax, so if you are outside that city or state, why should you pay the tax?
2) Unless an Internet business has a physical location in a state, they don't really have to pay sales tax to states they do business in
3) it saves business money by not having to do all of the extra accounting to keep up with all of those tax codes and rates and keep up with the money and funnel it to the corrrect places.