Interstate Commerce exemption from Sales Tax, mostly...
djkindred said:
Can someone explain the tax loophole and wish to save money anyway possible. I live in the Dallas, Texas area and their is an Apple Store in my county and city. I was about to order a 15" Powerbook online with Education discount but if I can learn about this tax loophole it would be a great help. And if their is something special about Florida taxes I have relatives that live their and could use them to send it to.
Sales Tax loophole in Interstate Commerce
You can avoid paying SALES TAX altogether if you buy a computer (or anything) over the internet in interstate commerce (between states).
TEXAN buys PowerBook over Internet from catalog retailer in California.
No California Sales Tax is paid by Retailer there because you are out of state (not in California) when you purchased it, and
No Texas sales tax can be easily collected on a Texan buying something out of state (not in Texas) since the transaction did not wholly transpire in Texas. It is an "interstate purchase". No sales tax.
Some states, including Texas, have passed "use tax" laws that attempt to collect taxes from Texans who purchase items out of state but do not pay tax in the other state or in Texas. The problem is that it is easy for a State to collect tax from a known retailer because that retailer has to keep records and have the State's permission (
transaction privilege tax license) to do business.
Retailers are known Sellers.
You are not necessarily a "known buyer" falling within the provisions of the "use tax law".
You have to rat on yourself or volunteer to pay the tax. Duh?
(US tax loophole, states cannot charge Sales Tax on sales in another state, which is what Internet Sales out of the same state is all about. Understand?)
So the game is played by NOT BUYING a product from a retailer in YOUR STATE, but finding a SELLER in another state who will sell you what you want, and then SHIP it to your out-of-state address in Texas.
The INTERNET and CREDIT CARDS are what have made this possible.
Understand?
Apple Store online is the EXCEPTION to the rule, because it has a physical STORE or a
legal presence in virtually every one of the 50 states. So, when Apple sells something online or in a Retail Store, it charges the tax associated with either that Store's Retail Location or your home (delivery) address if over the internet.
IBM, XEROX, GATEWAY, and other large retailers are in the same boat. DELL, however, has no physical stores (to the best of my knowledge), and should not charge tax on citizens of any state except where DELL's warehouse & business office is located - which is always at least ONE state out of 50.
Nevada retailers are cool because there is NO SALES TAX in Nevada!
So a Nevada internet retailer never charges for or pays any sales tax to any state.
TEXANS:
Do not buy from Apple (except in Nevada) or you will pay sales tax.
Do not buy from a Texas Retail Store or you will pay sales tax.
DO buy from an out of state catalog store and you will NOT pay any sales tax...unless you want to pay a "use tax".
Any question?