Are you supposed to pay tax when buying online?

<p>When I buy online like from B&H they don't collect tax but am I supposed to file that and pay at the end of the year? Because compared to my local stores and B&H I can actually get lower price locally but with the tax it becomes higher. </p>

<p>It depends on what state you live in. Where I live, sellers MUST collect tax on any instate sales (including online). Very few people I know currently pay tax on out-of-state purchases.</p>

This is why we have a lot of state governments trying to fix the loophole and tax interstate orders.

 

In theory, in most states you're actually supposed to report the purchase on your tax return and pay tax on our it. Nobody

actually does that.

<p>Here in Illinois, the state law requires everyone to report on-line purchases from out of state and pay taxes on them.</p>

<p>Many people do not think that the state has any right to tax interstate commerce. </p>

<p>Most larger vendors will, of course, automatically collect sales taxes on sales <em>inside</em> whatever state they are located in, or where they have a "physical presence".</p>

<p> </p>

<p>There is perhaps (probably?) a line on your state income tax form where you report/pay tax on out-of-state purchases from the previous year.</p>

<p>(I don't know how states that do not collect personal income tax might handle it.)</p>

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<p>Nobody actually does that.</p>

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You've talked to everyone who buys online out of state? If not, how do you know that?<br /><br /><br />FWIW, I report mine, they are business expenses and I don't particularly want to deal with audit problems.</p>

<p>In California, when you use Turbo Tax to file your CA state return, it will ask you if you bought anything out of state during the year and didn't pay sales tax.</p>

<p>I am in TX and only file federal and there is no such question.</p>

<p>Legally you are required to pay use tax in Texas for out of state purchases.</p>

<p>For those in Canada, upon the item being transbordered, or passing customs, the Canadian federal and provincial governments levy their taxes (about 13 to 15% depending upon the province, other than Alberta which is just the 5% federal tax as there is (was?) no provincial sales tax). Given that the Canadian dollar has receded from roughly parity with the US dollar, to about 80% of it, with prices in Canada also increasing proportionately, purchasing other than Canadian manufactured items in Canada (yes, there are some still) has become quite expensive.</p>

What answer would you like? I give no serious tax advice whilst IRS gives no serious advice on what way I take a meter reading.

 

 

Seriously though. Here on Oahu we have two economies. Economy 1): " i can do the job for you on weekends but I have to have cash payment, " Economy 2)" I can do it with my regular crew and take your check or CC, but it will be a couple thousand higher." I faced this choice not long ago. Like the doors with the lady and the tiger, it is a dicey choice either way. It really is and here is why... The city of Oahu has just repaved our roads and potholes. And state is funding a rail sysem.....

 

That said If I get officially asked to comment I have to go with those that stand with the state and county and its revenue options.

 

We have a special twist in our taxes. Our state collects a GET, -general excise tax- not a sales tax and it applies to food and every service. Total suction of cash on the spot every day at every register AND at every stage of commercial transaction -- comes cumiulatively to a round 14%, with highest cost of housing in the country. And with one exception, the highest gasoline prices in the union...which also includes taxes,.

 

Thus I sympathize if not applaud those that might fudge on a ten to fifty dollar item from Amazon. . And what about those Cayman Island dodgers? Sorry this slips into another controversial no no a la Off Topic. I expect a uniform national sales tax on internet sales has to come sooner than later...I weep not.

I'm in Texas. Most businesses I order from online

are set up to handle collecting the state sales

tax, including Amazon.

 

As one of my friends who operates a one man

business pointed out, this can be a hardship for

some small businesses. Ethically, buyers should

be responsible for complying with their own state

laws.

 

One of the easiest ways we can help local

businesses and the state economy is to pay state

sales taxes for online purchases. Helps keep

everyone on equal footing. That way the

competition is down to price and customer

service.

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<p>Nobody actually does that.</p>

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<p>You're free to believe that, but to say it to someone who is seeking advice could hurt them. My wife and I are in California, and our tax accountant says we have to pay the tax. We pay it.</p>

<p>Once in a while, our best local photography shop, Samy's, has a "no tax," sale. They actually pay the tax, but don't charge it, so we're not liable for it, and it winds up being cheaper than our favorite NY stores.</p>

<p>As others have pointed out, this is a state issue, and most states charge a "use tax" on purchases made out of state on which tax has not been paid. States are not allowed to impose import duties between states, and cannot legally tax sales outside their own jurisdiction. So it is, of course, a sham and I keep hoping some legal eagle manages to challenge it simply on the grounds that, justified or not, it is based on language that is stupid and dishonest. You pay "use tax" if you did not pay sales tax in another state, but you do not pay "use tax" if you paid sales tax there, and the tax, exactly equivalent to the sales tax, and based exactly on sales, is, of course, a sales tax on goods imported across state lines, but it cannot be said to be that because that would be unconstitutional, so it's a "use tax" even though it's a sales tax. As Abraham Lincoln once pointed out, calling a tail a leg does not make it one.</p>

<p>I total it all up at tax time, and it usually comes to very little, so I pay it. I'm not really that upset about the idea of paying the tax itself. But I hate the linguistic chicanery. </p>

<p>I live in TX and own an online frame supply company. My company has to charge everyone that lives in TX sales tax unless they are exempt and file an exemption form with my company. When my company purchases online from a company that does not charge sales tax (usually because they are outside of Texas) we file with the state indicating that we made the purchase and we pay sales tax directly to the state. Individuals and businesses are supposed to do this, however, as many have said most individuals do not. However, most businesses do. People do not because most people don't even know they are supposed to and you are not likely to be audited by the state (I have never heard of it, but cant say it never happens). As a business owner I have to register with the state and I have to file with the state on regular basis for sales tax. Worse yet, I have been audited by the state and yes they verified that we were paying sales tax on all our purchases both in state and out of state. They also verified that customers we did not charge sales tax were either exempt or resided out of state. Even though the state found us 100% compliant it was still a painful process that cost a lot of time and money in staff overtime and accountant fees.</p>

<p>Thanks everyone! I though I bought the camera locally any way.</p>

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<p>You've talked to everyone who buys online out of state? If not, how do you know that?</p>

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<p>Obviously I mean that colloquially, not literally. Also, I'm not a tax advisor, and none of this should be taken as actual advice.</p>

<p>In New York, you are indeed meant to pay state tax on online purchases if it was not charged already.</p>

<p>"I am in TX and only file federal and there is no such question."<br /><br /><br />Oh, there's questions alright... http://www.window.state.tx.us/taxinfo/taxforms/01-forms.html#Sales</p>

<p>There seems to be confusion between whether a state tax is due and whether an out-of-state seller is required to collect it. The answers are yes and no. One state has no power over businesses in another state.</p>

<p>The reality is that many people don't pay all the taxes that are due. In the case of interstate sales, this is probably because there's almost no possibly that their tax evasion will be discovered, and also because it is widely believed that no tax is due.</p>

<p>I wonder why sellers are not obliged to charge taxes of out of state purchasers, even if the taxes are at the source and not of the state where the merchandise is going to. That might be the easiest solution for the governments. It might also enhance business profitability of camera stores in the states where the product is going to.</p>

<p>Shams of greater importance, although legal and possible under current legislation, are the number of multinationals of everyday names that do business in a country where the income taxes are high but use mechanisms to transfer a large part of their statement of earnings to those few countries (Luxembourg, Isle of Jersey, other various island republics or colonies) where very low taxes prevail, thereby robbing the country, where production or sales occur, of important tax revenues. The computer I am writing this on and much of the software are a few of those companies.</p>

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<p>I wonder why sellers are not obliged to charge taxes of out of state purchasers, even if the taxes are at the source and not of the state where the merchandise is going to. That might be the easiest solution for the governments. It might also enhance business profitability of camera stores in the states where the product is going to.</p>

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<p>Because the retailer would have to keep track of every locale's state, county, and sometimes city sales tax rates, then report the appropriate sales to the appropriate authority. A lot of work that the retailers don't want to do.</p>

 

<p>Charles, I was suggesting that independent of where the buyer was from, the seller should charge him or her his local sales tax and simply leave it at that. If I buy from NYC and live in Canada or Arkansas, or Paris, I would simply pay the New York sales tax. It is NYC where I would be doing business and not in my own home territory. i am sure my local camera equipment sellers would also be happy with that. </p>

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<p>Because the retailer would have to keep track of every locale's state, county, and sometimes city sales tax rates, then report the appropriate sales to the appropriate authority. A lot of work that the retailers don't want to do.</p>

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<p> <br>

It's zero work. It's 100% automated, you just get software that plugs into your ecommerce payment page.</p>

<p>Thanks everyone! That's one more reason for me to buy locally because buying online could save me the tax but not really as I would be violating the law. I have found that local stores no longer have higher prices than a reputable online stores like B&H. </p>