Online/Out-of-State Sales "Use Tax"?

[mrreindeer]

I don't think this has been addressed here; I checked the search. But forgive me if it has.

I just received in the mail a letter from my Accountant informing me of the California "Use Tax" for out-of-state (and therefore seemingly 'tax-free') online (or regular) purchases.

Am I living in a closet? I've never heard of this. Have you?

I thought purchases out-of-state and online were just 'tax-free'. I guess I'm just a bit naive (maybe a little stupid) but maybe I should have thought about it. However, if I buy something in Pennsylvania and they don't tax me and they ship to me in L.A., why on Earth would I pay California sales tax on that item? Yeah, it's taken revenue away from the state when I'd otherwise buy in California...oh, wait, I get it.

So now the Accountant is suggesting that we declare our online purchases on our tax return.

We don't do a lot of online purchasing out-of-state or much online purchasing, for that matter. Yet. But I know a lot of my BOTL/SOTL do.

So, will you declare your online out-of-state/out-of-country "use tax"?

[madurolover]

I claim nothing. If they want it they have to come get it!

[chippewastud79]

It has been discussed before. Legally you are supposed to pay sales tax on everything you buy in the state you purchase it from. So buying hundreds of dollars of cigars from a site (try thepartysource.com ) you are supposed to call your state and tell them you owe XX% of sales tax. Nearly everyone does not do this, but I am sure there are some out there who do.

On a similar note, if you pay more sales tax in a year than income tax you can then use that when you file taxes. My accountant told me that, but then again she is my fiance, so maybe she is a liar

[BlueHavanaII]

FYI... you are also supposed to declare and pay the OTP (Other Tobacco Products) tax!

[Gambit]

A friend recently received a bill from a state tax agency stating that he owed them a certain amount of sales tax for out-of-state cigar purchases. I am not sure from which state this came although he orders almost exclusively from Thompson Cigar Co.

It seems that the only way the state agency could have gotten his purchase amounts would have been from the retailer he ordered from.

Be afraid!!!

PS. This is not a slam on Thompson as I am not sure exactly how this happened and they may have had nothing to do with it.

[TOJE]

IMO the store that sells it to you should collect all the taxes for your state. Tobacco and sales taxes. JMO.
It may not what anyone wants to hear except if you own a B&M and people are buying on line. B&M sales will go up and the prices for the most part will all be the same thus making you want to shop at your local B&M to avoid the shipping charges.

[BlueHavanaII]

Originally Posted by TOJE

IMO the store that sells it to you should collect all the taxes for your state. Tobacco and sales taxes. JMO.
It may not what anyone wants to hear except if you own a B&M and people are buying on line. B&M sales will go up and the prices for the most part will all be the same thus making you want to shop at your local B&M to avoid the shipping charges.

TOJE FOR PRESIDENT!!!

[jloutlaw]

Originally Posted by Gambit

A friend recently received a bill from a state tax agency stating that he owed them a certain amount of sales tax for out-of-state cigar purchases. I am not sure from which state this came although he orders almost exclusively from Thompson Cigar Co.

It seems that the only way the state agency could have gotten his purchase amounts would have been from the retailer he ordered from.

Be afraid!!!

PS. This is not a slam on Thompson as I am not sure exactly how this happened and they may have had nothing to do with it.

The state may have audited Thompson's and they had no choice.

[scottw]

Originally Posted by madurolover

I claim nothing. If they want it they have to come get it!