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INTERNETS SALES NO TAX


Zedrush

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Hi guys not sure if anyone can help with this, or help me understand if this is true, tax laws is not my stronghold just doing some research for USA, and just read this on gov site:

 

In reality, for traders within the US who obey local tax laws, the Internet has been an almost tax-free zone because of the moratorium on Internet access taxes and the ban on taxation of inter-state supplies of products and services.

 

For many states, on-line cigarette sales are particularly hurtful for the tax-base. States like New York and New Jersey find tax revenues dropping dramatically as smokers buy from on-line stores.

 

Thats insane, so if I were to set up in Cali, and have buyers from other states, I wouldnt be liable to pay tax, guess it be down to the consumer to declare which would be highly unlikely...

 

Its almost like they treat other states like a different country, guess tax from state to state vary so much that it would be hard to implement a solid tax code for inter-state internet purchases, so they just leave it kinda up in the air...

 

Have I understood this right or am I missing something :blush:

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You've got it spot on - each state has different tax rates and laws, everything sent outside the state is tax free regardless of where its going.

 

Also some American companies have a clever operation for customers for getting past tax laws. Say if you go to a performance store and buy a new air filter for you 350Z in California. If the company has multiple locations (I know of several in this marketplace that does) they will send from there Texas warehouse to the store in California, and invoice you from the Texas location, therefore out of state and therefore tax free.

 

Interesting system!

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You've got it spot on - each state has different tax rates and laws, everything sent outside the state is tax free regardless of where its going.

 

Also some American companies have a clever operation for customers for getting past tax laws. Say if you go to a performance store and buy a new air filter for you 350Z in California. If the company has multiple locations (I know of several in this marketplace that does) they will send from there Texas warehouse to the store in California, and invoice you from the Texas location, therefore out of state and therefore tax free.

 

Interesting system!

 

Bloody ell :scare: very interesting system B) Wouldnt make much of a difference to the company selling I guess as if you were to impose tax that portion would go to the tax man anyway, but for a consumer point of view, they could save a few dollars for sure, to such an extent that they might buy a treadmill online out of state rather than purchasing it from their local store... insane :wacko:

 

But then again like you say if you have multi stores, you could charge the consume instate tax, but then like you say send from another state and keep the tax portion you charged the guy instate to yourself B) That way you as a seller would benefit :thumbs:

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