Broken off from a tangent on a recent thread...
Beyond the potential for lower prices available when purchasing items on-line, most folks also factor "no sales tax" into their overall savings from online purchases. These savings are, however, illusory. If you live in a state which charges a sales tax you still owe that tax, regardless of where you purchased the item. This is for the most part also true for any other county, municipal, or jurisdictional sales tax that might be owed where you live.
A Use Tax is a substitute for sales tax. All states which have a sales tax also impose a use tax. The use tax rate is the same as the sales tax rate, and is based on the purchase price of the item
Use tax applies when sales tax has not been charged. For instance, if you live in California and purchased goods from a supplier located in NY, whether by mail order or by taking delivery in NY, use tax is due and payable in California if the goods are brought to California. Purchases made over the internet and out-of-state are the most common type of transactions subject to a use tax. A state resident does not escape sales tax by purchasing out-of-state or over the internet.
Under state laws in the 45 states that do impose a use tax, any person who evades the reporting, assessment or payment of sales taxes or use taxes that would otherwise be due may be guilty of tax evasion. Violators are subject to fines, penalties, interest and/or prosecution. Note that "I didn't know there was such a thing as a use tax..." is not an adequate defense for evading payment.
So, have you paid YOUR use tax lately?
Beyond the potential for lower prices available when purchasing items on-line, most folks also factor "no sales tax" into their overall savings from online purchases. These savings are, however, illusory. If you live in a state which charges a sales tax you still owe that tax, regardless of where you purchased the item. This is for the most part also true for any other county, municipal, or jurisdictional sales tax that might be owed where you live.
A Use Tax is a substitute for sales tax. All states which have a sales tax also impose a use tax. The use tax rate is the same as the sales tax rate, and is based on the purchase price of the item
Use tax applies when sales tax has not been charged. For instance, if you live in California and purchased goods from a supplier located in NY, whether by mail order or by taking delivery in NY, use tax is due and payable in California if the goods are brought to California. Purchases made over the internet and out-of-state are the most common type of transactions subject to a use tax. A state resident does not escape sales tax by purchasing out-of-state or over the internet.
Under state laws in the 45 states that do impose a use tax, any person who evades the reporting, assessment or payment of sales taxes or use taxes that would otherwise be due may be guilty of tax evasion. Violators are subject to fines, penalties, interest and/or prosecution. Note that "I didn't know there was such a thing as a use tax..." is not an adequate defense for evading payment.
So, have you paid YOUR use tax lately?
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