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shipping address vs billing address?
- Thread starter twoodcc
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twoodcc said:how come tax is based on shipping address and not billing address? doesn't make sense to me
because that is where the goods will be recieved, used and such.
same reason you have to pay taxes on importing goods etc.
PlaceofDis said:
well i don't know, it just makes sense to me that you pay taxes from where you're billing address is. usually that is where you live.
ITASOR said:
You are correct...but sales/use taxes are designed to be imposed on the location of the end user. The product is ultimately being used by a resident of CA, and thus that's where the tax is due. If you in NY order from a vendor Texas and have something sent to California, why should NY get anything from the transaction?
Yes, if you buy it in a store in NY and send it to your friend in CA you will be paying NY tax, but that's mostly because of limitations on how the sales tax system can be implemented without imposing undo strain on commerce. (That and the fact that you are actually purchasing from a NY-based merchant.) You'd have to have people filling out affidavits saying where the product was going to end up being used, and then the store would have to have some sort of database to keep track of all of it. It's simpler to just impose taxes based on shipping destination, as that information is already in the vendor's database. It's not a perfect system, but it's simple.
twoodcc said:
Then you'd have lots of people setting up credit cards using sales tax-free billing states as the billing addresses to avoid the tax. Yes, there are ways to do this in reverse now where you shop across state lines where there's no tax or have things sent to a friend in a tax-free state, but they're much more complicated to pull off.
well it seems like it would be difficult to have a credit card with a billing county of your choosing. it seems hard to me at least. you gotta have an address somehow in the county/state
twoodcc said:
You could just get a PO Box or use a friend's house in a tax-free state. Then sign up for online statements and BillPay...no paper and no mess.
WildCowboy said:
but some don't use PO boxes anymore. and not everyone has a 'friend' in a tax-free state.
i still think it'd be harder than you are trying to make it sound. not that it can't be done, but not where everyone and their brother would be doing it
Simple analogy, you buy electronics at Best Buy. You are subject to sales tax at the rate where the store is becuase that is the place of delivery. Even though you may actually live ("billing address") in a locale that does not levy the same sales tax rate, if any.
Those rules keep me from buying an iMac for my use in Nebraska, having it shipped to my house in NE and sending the bill to a relative in Oregon w/o a sales tax to avoid it.
Those rules keep me from buying an iMac for my use in Nebraska, having it shipped to my house in NE and sending the bill to a relative in Oregon w/o a sales tax to avoid it.
jessep28 said:
if this theory was correct, then i'd get taxed from China, since that's where it's coming from, correct?
No, its the locale where delivery of the final product takes place.
Even though the product may have come direct from China, if delivery took place in Omaha, NE then Omaha & State of NE would receive the sales tax.
Another analogy: I purchase a car from an owner in Iowa. I have to register and pay taxes in the county in Nebraska that I live in. Yeah the car was "bought" in Iowa, but final delivery actually took place when I parked it in front of my house.
I'm sure there are ties to where title is acutally being transferred to, but I only have general familiarity in terms of that area of the law so it's not in my interest to go yapping on when I may be wrong too.
Even though the product may have come direct from China, if delivery took place in Omaha, NE then Omaha & State of NE would receive the sales tax.
Another analogy: I purchase a car from an owner in Iowa. I have to register and pay taxes in the county in Nebraska that I live in. Yeah the car was "bought" in Iowa, but final delivery actually took place when I parked it in front of my house.
I'm sure there are ties to where title is acutally being transferred to, but I only have general familiarity in terms of that area of the law so it's not in my interest to go yapping on when I may be wrong too.
jessep28 said:
what do you mean "final product"? the final product does come from China [sometimes]
are you saying, whever it's shipped from should receive the sales tax?
generik said:
Alaska, Delaware, Montana, New Hampshire, and Oregon.
twoodcc said:
No, it's wherever the product is being used/consumed that should receive the tax, which is what he's saying. It's the same reasoning as that behind foreigners being able to file to get their VAT back when they purchase items in Europe.
Just a word of warning here. I do realize some of you have valid questions and some of you are also answering said questions. However some of you are speaking loosely and out in the open of Tax Evasion. I know this site likes to keep things we speak of moral and ethical. Technically by Tax laws (which of course are federal) even if you go to one of these states with out taxes or send the product there and pick it up you are legally obligated to report said product and pay your taxes on them. Quite obviously not many people at all do this , otherwise they wouldnt bother with sending it there to begin with. I live and work in NJ PA area and have DELEWARE down the road and deal with these issues all the time. It may be a grey area but it is still out and out tax evasion when it gets right down to it. Just a word of warning. I know not many people take it seriously but I know this commuinty looks down upon people who ignore those grey areas.
Kevin
Kevin
What about us?
I say that tax should be based on your PHYSICAL USE ADRESS not billing or shipping! I work for the Foreign Service as a Diplomat. My SHIPPING address in in Virginia, but I do not live or work there. I work all over the world.
We have a U.S. Mailing address so we can send and recieve mail without paying the cost of overseas postage and to avoid long custom delays. Our mail is picked up in VA and delivered to us overseas by the State Dept for free.
The same holds true for MILITARY personnel stationed overseas, who have a U.S. Shipping address (APO) but their billing address is in another State.
For us diplomats, our State of Legal Residence, Bank address, MAILING address and PHYSICAL address are in 4 different places!
My LEGAL residence is in NH (no sales or income tax)
My Bank is in New Mexico
MY U.S. Diplomatic MAILING address is in VA (sales tax)
My Physical adress is in Warsaw, Poland (no sales tax)
To charge me SALES tax for VA, a state I never step foot in, makes NO sense to me.
Peter Kennett
U.S. Embassy, Warsaw, Poland
I say that tax should be based on your PHYSICAL USE ADRESS not billing or shipping! I work for the Foreign Service as a Diplomat. My SHIPPING address in in Virginia, but I do not live or work there. I work all over the world.
We have a U.S. Mailing address so we can send and recieve mail without paying the cost of overseas postage and to avoid long custom delays. Our mail is picked up in VA and delivered to us overseas by the State Dept for free.
The same holds true for MILITARY personnel stationed overseas, who have a U.S. Shipping address (APO) but their billing address is in another State.
For us diplomats, our State of Legal Residence, Bank address, MAILING address and PHYSICAL address are in 4 different places!
My LEGAL residence is in NH (no sales or income tax)
My Bank is in New Mexico
MY U.S. Diplomatic MAILING address is in VA (sales tax)
My Physical adress is in Warsaw, Poland (no sales tax)
To charge me SALES tax for VA, a state I never step foot in, makes NO sense to me.
Peter Kennett
U.S. Embassy, Warsaw, Poland