I'M P.O.-ed please HELP

[chigirl]

Hmm interesting, thanks for the info, although it kinda stinks. What exactly is a "use tax?"

A use tax is the counterpart to and complimentary to the sales tax. Basically, you pay a tax to your state of residence for items that are purchased for use in the state when no sales tax has been paid. So the use tax applies only when there is no sales tax. The rates of the sales and use tax are the same.

Legally, you are required to file a use tax return listing all purchases subject to the tax and then you must pay the tax. In some states (maybe NY?), this return is part of your income tax return. So in these states, you are basically signing something saying that you have no use tax liability.

To give you even more information, there is a push right now on the national level to "streamline" the sales tax so that all vendors will eventually be required to collect sales tax regardless of whether they have a store in the state. Currently, there is a Supreme Court case that basically states that vendors are not required to collect sales tax unless they have physical presence in the state (otherwise known as nexus). Because of this case, called Quill, states are losing enormous amounts of revenue due to internet sales. What the proposed legislation would do is streamline the sales tax so that it is easier for the vendors to collect the tax. As the sales tax system now stands, it is deemed an undue burden because the laws in each state vary so much that it is hard for vendors to keep track of it all.

Too much information and there are some more nuances...sorry but hope that helps!!!

 

[chigirl]

So could the saks store in Ohio send it to me as a gift and not charge me tax?

Not exactly and there is some question about whether this position is the correct one. I would argue that there should be no tax but not every vendor or state would agree. However, stores like NM and Saks I believe would not charge tax if for example your aunt in NY ordered a bag for you from Saks NY to be sent to you in Michigan. In this instance, there is no sales tax or use tax due. I could explain why but I would be getting even more technical and it is pretty complicated.

 

[chigirl]

If I travel to a state where there is no sales tax, bought something expensive like a car, diamond, or tons of LV bags and bring them back to my state where there's sale tax, would they charge me tax than?

My 1000th post -- a state like NH (with no sales tax) would not charge you sales tax but if you went back to your home state (say MA) you would be required to pay use tax.

The problem for the states is that they have no way of monitoring and therefore enforcing this law so that is why this new legislation has been proposed.

Sorry to bore all of you!!!!

 

[LVLover]

Thanks for all the info, basicly it boils down to "the tax man is gonna collect one way or another" and boy it stinks! Oh well, I'm gonna get over right now and not let it ruin my excitement.

 

[chigirl]

Thanks for all the info, basicly it boils down to "the tax man is gonna collect one way or another" and boy it stinks! Oh well, I'm gonna get over right now and not let it ruin my excitement.

It does and it doesn't. Right now the tax man isn't collecting because of all these internet transactions and people not reporting them and that is a huge problem for their coffers. What it means, however, is that they have to get money from other means so they do get you I guess through higher property, income , and sales taxes. They need to make up for all the lost revenue that has resulted in the last few years as a result of the internet.

 

[Leah411]

The whole sales tax when ordering online, etc., confuses the daylights out of me. I see people here post that although they live in a state with a sales tax, they save the tax if they order from ELuxury.

I live in Oregon. We have no sales tax. If I go shopping across the border in Washington, I can show my driver's license and I don't get charged sales tax.

But when I shop online...some places will charge me sales tax. When I protest, they tell me it is done by where the company is located, not where the customer lives. Huh?