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I'm a California resident and it seems to me that I read once a long time ago that if a resident is buying online from an-out-of-state entity that has NO physical presence in California and NO connections whatsoever with the State, that that resident still has to fork over to the Equalization Board the exact amount of sales tax just as if that resident had purchases the item(s) in a brick-and-mortar here in Cali. I have researched on the internet and cannot find any actual statute. Naturally, I don't want to pay any money I don't legally owe, but if I do owe it BY STATUTE then I'm honor-bound to pay it. Does anyone know if such a statute exists for Cali residents? Thanks in advance for any info.
Michigan has what are called 'use taxes' for purchases made out of state for consumer goods that are shipped back to Michigan. This use tax is the twin of the state sales tax, which is applied to nearly all items purchased within the state. Payment of the use tax is mostly voluntary, there's a section on the Michigan 1040 tax form for estimating the tax. However, there's nothing to stop the state tax office from reviewing your credit card transactions during a tax audit and charging you with unpaid use taxes if they find out-of-state sales not accounted for on your tax return.
The Supreme Court has ruled in favor of state use taxes when they are intended to recoup lost state sales tax revenue from interstate sales.
And a quick google indicates that there is such a thing as a California Use Tax.
You probably do owe it. Every state has use taxes-- it's just that, until the proliferation of amazon and other online merchants, states kind of left it on the honor system for their citizens to pay them, and very few people ever did, maybe except for cars. Typically, if you paid sales tax in the state where you bought the thing, then you don't have to pay it again. But if it was a tax-free purchase, then yeah, the use tax is probably there. And amazon collects sales tax in lots of states because they have lots of distribution centers.
I guess the BOE will get the shock of their life when they get a check from me then. Imagine--a resident who actually stepped forward to pay a tax the state didn't even know I owed!
I guess the BOE will get the shock of their life when they get a check from me then. Imagine--a resident who actually stepped forward to pay a tax the state didn't even know I owed!
Because so few people pay it, it can actually be a red flag, as in what are you trying to hide by paying this tax?
Your supposed to report it and pay taxes on it when you do your taxes. Nobody I know does this. I live in Massachusetts close to the New Hampshire border and NH has no sales tax so many people buy items there.
Its interesting though cause MA was trying to make or wanted the companies in NH to report those that lived in MA but were buying items in NH so they would get the taxes. It started with a car tire place that was in NH (right by the MA border) and many from MA would go there. There aren't a lot of shopping malls and stores in MA once you get along the MA/NH border. My opinion is if MA could do that, would they pay the NH residents back the 6.25% tax if those NH residents shopped or bought something in MA...of course not.
Your supposed to report it and pay taxes on it when you do your taxes. Nobody I know does this. I live in Massachusetts close to the New Hampshire border and NH has no sales tax so many people buy items there.
Its interesting though cause MA was trying to make or wanted the companies in NH to report those that lived in MA but were buying items in NH so they would get the taxes. It started with a car tire place that was in NH (right by the MA border) and many from MA would go there. There aren't a lot of shopping malls and stores in MA once you get along the MA/NH border. My opinion is if MA could do that, would they pay the NH residents back the 6.25% tax if those NH residents shopped or bought something in MA...of course not.
Its all about greedy politicians. State tax here is 8.75% to over 9.0% & that adds up fast.
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