Sales tax question

BLOOD SWEAT STEEL · 12-09-2006, 04:52 PM

As long as I've ever bought stuff online (10 years?) I can't ever remember the vendor ever collecting sales tax unless they're in my same state. And I buy A LOT of stuff online.

http://www.vitamix.com/household/pro...c=ggl&msg=349b

I went on to the Vita-Mix site today to buy the Vita-Mix 5000 and at checkout, it showed 7.75% NV sales tax. The company and shipping origin is in Ohio. I called their 1-800 number and the representative told me that everybody has to pay sales tax unless they're in OR or NH. I said okay thanks. WTF? Are these guys scamming customers for tax that they shouldn't be collecting, or am I missing something here?

BLOOD SWEAT STEEL · 12-09-2006, 04:58 PM

Found this on their FAQ page:

Q: Why does Vita-Mix charge sales tax?
A: Vita-Mix charges state & local tax because of our direct selling activities. We are required by law to collect sales tax according to the applicable rate in the area where delivery is made. The rates are the state rates plus local tax. If tax rates change, we are required to collect the tax in effect at the time of your order.

Huh? What exactly does "because of our direct selling activities" mean?

**Steven S. Dallas** · 12-09-2006, 04:59 PM

No scam- from the beginning of internet retail there was disagreement between states and retailers over whether online sellers should have to collect sales taxes. More and more states have simplified sales tax regimes and passed laws letting e-tailers off the hook for the sales taxes they should have been collecting all along, so now it's fairly standard practice.

**cj001f** · 12-09-2006, 05:03 PM

Originally Posted by BLOOD SWEAT STEEL

Huh? What exactly does "because of our direct selling activities" mean?

That they have a location of some sorts in your state, ergo, you have to pay sales tax.

BLOOD SWEAT STEEL · 12-09-2006, 05:08 PM

Originally Posted by cj001f

That they have a location of some sorts in your state, ergo, you have to pay sales tax.

But in every state? See - that's the part that's confusing. They're only available by online/phone/fax or mail.

**kona12** · 12-10-2006, 12:50 AM

Originally Posted by BLOOD SWEAT STEEL

But in every state? See - that's the part that's confusing. They're only available by online/phone/fax or mail.

Because they are direct selling they are treated as if they are actually present in the state thus the tax. Since they probably direct sell in each state they have to tax all states at the appropriate rate.

As for standard internet purchases and taxing, more and more legislation is introduced every year to close this tax loop hole.

**cj001f** · 12-10-2006, 01:05 AM

Originally Posted by BLOOD SWEAT STEEL

But in every state? See - that's the part that's confusing. They're only available by online/phone/fax or mail.

I'm assuming they have affiliates (paid sales people) earning a commission in all 50 states

The other option is they are scamming you, wouldn't be the first time companies have charged fake/inapplicable taxes. Northwest Airlines charged Frequent Fliers for taxes they weren't required to collect.

**mnflyfish** · 12-11-2006, 10:17 AM

Same thing happend to me with Orvis, and I ended up on the phone with their CS. They were trying to charge me Sales Tax on clothes, and MN doesn't charge sales tax on clothes. It took me a bit of time but it got worked out. I believe that a lot of the larger corps are charging to get ahead of things because all sites will be required in the future to charge tax.

Good Luck,
Jay

**lemon boy** · 12-11-2006, 10:53 AM

as indicated above, should be kosher. Call the NV DOR to check their reg. # if you really doubt.

Reprinted from another thread:
Lemon Boy's ULTRASIMPLIFIED 50 state non-specific rule of thumb for individuals and their state's sales/use taxes when buying tangible personal property and/or taxable services:

1. Find out what the sales/use tax rate is at your house*
2. If you go to a Brick & Mortar in your state and buy something and pay sales tax, don't worry.
3. If you go to another state and buy something at a B&M in that state and the rate is higher than #1, don't worry.
4. If the rate in #3 is lower than #1, you technically owe use tax (in most states**) on the difference between the rate you paid and #1
5. If you buy from the internet/catalog and are not charged any tax technically you owe #1 (again in most states**)
6. If you buy from the internet/catalog and are charged some random rate and it turns out to be your state, don't worry. If it is another state you shouldn't pay that rate but are instead on the hook for use tax at the rate in #1.

A handy resource for finding info on your state: http://www.taxsites.com/state.html#links <http://www.taxsites.com/state.html> <http://www.taxsites.com/state.html>

*if you're buying a plane or a boat that may not necessarily be there it might be different but as a practical matter this would be your use tax rate.
**A two minute phone call to your state's DOR will learn you if they actually expect you to pay use tax as an individual if you were not charged the right sales tax.

**Blatant** · 12-11-2006, 07:26 PM

glad i have one of my permanent residences in NH.

**Dexter Rutecki** · 12-11-2006, 08:00 PM

I paid it on my pass this year, realized 20 minutes after buying it that if i'd done it through the NH area's site I would've avoided it. Oh well, more money contributed to the People's Republic of VT.