New Zealand adds 15% GST to (some) ebooks from today

[John F]

Originally Posted by HarryT

Given that retailers who do have a physical presence in a state already have to do it, clearly it is feasible to do.

I because something (legally) has to be done, doesn't clearly mean that it is feasible.

[HarryT]

Originally Posted by John F

I because something (legally) has to be done, doesn't clearly mean that it is feasible.

I'm sorry, but you've slightly lost me. Retailers who have a presence in a state have to charge sales tax. True? Plainly, that being the case, the task of deciding the correct rate of sales tax to charge based on the customer's location, is not an insurmountable one, because innumerable retailers do precisely this.

[gweeks]

Originally Posted by HarryT

I'm sorry, but you've slightly lost me. Retailers who have a presence in a state have to charge sales tax. True? Plainly, that being the case, the task of deciding the correct rate of sales tax to charge based on the customer's location, is not an insurmountable one, because innumerable retailers do precisely this.

The retailers charge sales tax based on the retailer's location, not the customer's home location. The retail store only has to keep track of it's own tax rate.

Greg

[HarryT]

Originally Posted by gweeks

The retailers charge sales tax based on the retailer's location, not the customer's home location. The retail store only has to keep track of it's own tax rate.

Greg

Thanks, Greg, I didn't know that. If one does a Google search for "US sales tax calculator", though, there seem to be innumerable resources for looking up the rate of sales tax from a ZIP code, so it doesn't seem like much of an issue even if the customer's location were involved.

[pwalker8]

Originally Posted by gweeks

The retailers charge sales tax based on the retailer's location, not the customer's home location. The retail store only has to keep track of it's own tax rate.

Greg

Yep, that's why one sees people buy cars in a different city or even states, to avoid the higher local sales tax. It can be significant if you are talking about big ticket items like cars.

[pwalker8]

Originally Posted by HarryT

Thanks, Greg, I didn't know that. If one does a Google search for "US sales tax calculator", though, there seem to be innumerable resources for looking up the rate of sales tax from a ZIP code, so it doesn't seem like much of an issue even if the customer's location were involved.

Sales tax calculations are actually extremely complex in the US. Many places exempt certain items from sales tax. Here in Georgia, there are some weekends where items that could be used for school are exempt from sales tax. It's not uncommon for different items to be taxed at different rates in the same location (example, cigarettes and liquor). You can have a state sales tax, a county sales tax, a city sales tax and a special tax district sales tax, all of which are at different rates and cover different items. In addition, all of this can change at various times during the year.

[gweeks]

Originally Posted by pwalker8

Yep, that's why one sees people buy cars in a different city or even states, to avoid the higher local sales tax. It can be significant if you are talking about big ticket items like cars.

Except most states have this thing where you have to register your car in order to get this thing called a license plate. When you do so, most states require you to pay the difference in the sales tax rates. KS/MO even have it set up so that a MO resident buying a car in KS can title the car and pay the correct tax from the KS dealer and still get a correct MO plate. It probably works the other way as way as well for the plates, but I don't know of anyone doing it that direction. That's a result of the KS/MO split of Kansas City. Go buy a car in OH as a PA resident and you'll pay the tax difference when you register. They'll look the blue book up for used cars and if you paid significantly less than blue book, you have to pay the blue book tax rate anyway. I'm sure there are states that don't bother, but every state I've ever lived in does.

Smaller purchases of course aren't always caught.

Greg

[Cinisajoy]

Originally Posted by HarryT

I was not referring to sales tax, but to "use tax": the tax that is due if you purchase something online (or by some other method) that you don't pay sales tax on. In such circumstances, you have to pay a use tax that is equivalent to the amount of sales tax that you would have paid had you purchased the item in Texas.

ie as specified here:

https://www.comptroller.texas.gov/ta...es/use-tax.php

There is massive fraud with use tax; a huge number of people don't pay it. In the example you cite above, you owe use tax on the third order, because no sales tax was paid on it, and the product is being used or consumed in Texas.

This is the first I had ever heard of that law. It is not well known.

[kacir]

Originally Posted by HarryT

I'm sorry, but you've slightly lost me. Retailers who have a presence in a state have to charge sales tax. True? Plainly, that being the case, the task of deciding the correct rate of sales tax to charge based on the customer's location, is not an insurmountable one, because innumerable retailers do precisely this.

As pwalker8 already explained, it is relatively straightforward to compute the sales tax in my location. But each little town in USA can have a slightly different sales tax on the same item. You pay state tax and then town tax and some other things, as far as I understand it. So the retailer would have to know precisely where the buyer is located (which can be different from the delivery address) and would have to find out state tax, county tax, town tax ... whatever else. AND, then they would have to send those money to relevant entity - state, county, town ...

If you are an artisan with an on-line store, selling 6 handmade dulcimers per year to a 6 different buyers in 6 different states, what are you supposed to do? Spend a week studying local taxes for Middle of Nowhere Township in North Dakota and then spend a week getting paperwork so you are registered to pay tax there?

[John F]

What a good discussion! I think I just saved some money. I thought that for my state, I had to pay sales/use tax on just about everything I ordered over the internet. I guess that is not the case:

Page 5
Q & A About the Connecticut Individual Use Tax 1. What is use tax? Connecticut taxpayers owe use tax on purchases of taxable goods or services when Connecticut sales tax is not collected at the time of sale. Most often, this results from purchases made online or out-of-state. Together, sales and use taxes assure that taxable purchases of goods and services used in Connecticut are treated equally and fairly.
2. Who pays use tax?
If Connecticut sales tax is not paid to the retailer at the time of purchase, Connecticut law requires that the purchaser pay use tax
directly to the DRS.
3. On what kinds of goods or services must I pay use tax?
You must pay use tax on taxable goods whether purchased, leased or rented, and taxable services. Taxable goods include:
furniture, jewelry, automobiles, appliances, cameras, computers, and computer software.
Taxable services include: repair services to your television, motor vehicle, or computer; landscaping services for your home; and
reupholstering services for your household furniture.

Amazon has no retail presence in my state. I can see them charging me use tax, but they shouldn't be charging me sales tax? And yet it looks like Amazon is miscalculating the use tax. For example, I bought some bearings, and they charged sales tax.

[John F]

Originally Posted by kacir

As pwalker8 already explained, it is relatively straightforward to compute the sales tax in my location. But each little town in USA can have a slightly different sales tax on the same item. You pay state tax and then town tax and some other things, as far as I understand it. So the retailer would have to know precisely where the buyer is located (which can be different from the delivery address) and would have to find out state tax, county tax, town tax ... whatever else. AND, then they would have to send those money to relevant entity - state, county, town ...

If you are an artisan with an on-line store, selling 6 handmade dulcimers per year to a 6 different buyers in 6 different states, what are you supposed to do? Spend a week studying local taxes for Middle of Nowhere Township in North Dakota and then spend a week getting paperwork so you are registered to pay tax there?

And sales tax vs use tax may have different rules. For example, "most goods" in my state are subject to sales tax, while use tax is limited to specific items (see my previous post).

[JSWolf]

Originally Posted by HarryT

Paper books are zero rated.

The EU lawmakers are in the pockets of the BPHs who want to screw with eBooks in order to keep their pBooks alive.

[HarryT]

Originally Posted by Cinisajoy

This is the first I had ever heard of that law. It is not well known.

Well, now you do know and you'll have the pleasure of paying it.

[HarryT]

Originally Posted by John F

Amazon has no retail presence in my state. I can see them charging me use tax, but they shouldn't be charging me sales tax? And yet it looks like Amazon is miscalculating the use tax. For example, I bought some bearings, and they charged sales tax.

Nobody will ever charge you use tax. Use tax is the tax that you are responsible for paying yourself (where appropriate) when you've not been charged sales tax.

[issybird]

There are now sales tax laws called, you guessed it, Amazon laws, whereby a company has to charge the applicable sales tax for the delivery address even in stars where it doesn't have a physical presence. It apples to several states and I believe involves only companies of a certain size, so that artisan cited above only had to collect for her home state.

I haven't made a big study of this, though, since there's no sales tax in my state and it's just of (limited) academic interest to me.