Internet Sales Tax

[Andy Bassett]

Hello Marc

Maybe you can help me out on a none Quality related problem.

In Europe we have something called Value Added Tax VAT which is charged on goods when they are sold, the money is then paid to the poor government.

I think you have the same in America, but you call it a Sales Tax, and that it is different from state to state. So the question is, if something is sold from one state to another, which sales tax is paid? Do Internet companies supplying goods from outside but into America have to levy and pay the Sales tax?

Any help appreciated on this subject.

Regards

Andy Bassett

 

[Marc]

It gets kinda complex. Right now there are no sales taxes on internet sales. If you call a company and order something you pay no sales taxes as long as you do not live in a state where the company 'has a presence'. If I call a company in California which has a warehouse in Ohio (I live in Ohio) and I want it delivered in Ohio I will be charged Ohio sales tax. I think technically each state wants the others to collect sales taxes for them for catalogue sales but it doesn't happen.

When you go to a store and buy something you pay the sales tax to that state. This is state sales tax.

There are many federal taxes which are based on the value of the purchase which are not directly called 'sales taxes'. Cigarettes, I think, gasoline, telephone service.

Personally I don't really mind all the taxes with consideration to everything they do.

 

[isodog]

You might have mentioned that internet sales are specifically exempted by federal law. So if Marc bought the computer from a California company that had an Ohio warehouse by phone, he would pay California sales tax, but if he bought it over the internet no sales taxes are due.

This law won't last forever. Too much money involved.

Just for the record, I DO mind paying all these taxes!
Dave

 

[Marc]

I don't know anything about the federal law - which is why I didn't say anything about it. I'm just going on what I know about catalogue sales. I rarely order anything over the internet because it's generally easier just to call - I typically have questions and want more information than the web page offers.

 

[Al Dyer]

I believe the federal law banning sales tax on internet purchases was a five year law that will come up in the next year or so for review.

I believe that in Michigan, catalogue sales are not directly taxed at the time of purchase but are supposed to be declared on the state tax return each year.

FYI

ASD...

 

[Laura M]

And here in NY we tax on the shipping and handling charges!