Question... (1 Viewer)

[dlthompson]

Hi all, I'm a long time lurker but have never posted. I just like to read other posts. But here is my question and sorry if it's off-topic as I didn't know where to post it.


I ordered some audio equipment from a dealer in my state (Florida). I never visited the dealer. I just ordered it over the phone. I really had no reason to pick this particular dealer other than the fact his store was the one that came up on the manufacture's website.


So he quotes me a total price and I order the stuff. About 30 minutes later he calls me back and says I have to pay Florida sales tax. I was kinda angry because sales tax on $2,000 is $140 and I realized I could have bought the stuff from any out of state dealer (or the manufacturer directly) and saved $140. But oh well, deal with it right?


But then I got to thinking, was he supposed to charge me sales tax? The stuff being purchased is from CA.

 

[Al.Anderson]

I'm not a lawyer or a tax accountant, but from what I've read he has to charge sales tax if his store has a brick & mortar in your state (FL); so yes, he was correct.

Why not just cancel the order and purchase somewhere else?

 

[gene c]

I don't think they even need an actual brick-and-morter store, just some kind of presence in the state (not sure what that means, though). Harman Kardon charges sales tax to 5-6 different states but they're located in CA. Maybe it's just a CYA situation, even if it means losing a few sales.


BTW, I'm not an accountant either so...

 

[Michael Reuben]

Originally Posted by gene c .) Every time this subject comes up, I end up saying something that annoys someone, because, let's face it, taxes are unpopular, and tax law is often counter-intuitive.


The whole concept of "presence in the state" is currently a subject of contention between the state and internet vendors. The states want it defined as loosely and broadly as possible, because they want every last penny of revenue they can get. The more broadly they define "presence", the more vendors they can force to collect and remit sales tax for them.


But the thing that really throws people is this: It's not the location of the vendor that causes the purchaser to owe the tax, but the residency of the purchaser. It's just a question of who has to collect and remit it. In the OP's original example, a Florida purchaser buying $2000 worth of goods shipped from out of state still owes $140 to the state of Florida, even if the vendor didn't collect it. It's now the purchaser's duty to pay it to the state in the form of "use tax". Don't believe me? Believe the [url=http://dor.myflorida.com/dor/taxes/sales_tax.html]Florida Dep't of Revenue.


AFAIK, every state that charges sales tax has an equivalent "use tax". Care to guess how many people voluntarily pay the "use tax" on out-of-state purchases? Exactly. That's why states are so eager to find ways to force internet vendors to collect the sales tax at the time of purchase.


BTW, I hate sales tax as much as the next person. And NYC's is higher than Florida's; so I'm not defending anything. Just describing how it works.