I was planning on ordering some items from a company in Washington state. They are going to charge me 8.8% sales tax. They are a small operation, so I doubt they have a ‘presence’ in Minnesota where I reside. I was unaware of any reciprical sales tax agreement between the 2 states(and usually I would pay the lower Minnesota sales tax in that case). Has anyone else ordered model supplies through a dealer in Washington state and had to pay their sales tax on mail order?
Jim
Check with another WA dealer. Sounds incorrect to me. Most businesses (Nat. chains excluded) only have to keep a record of what is shipped out-of-state to avoid paying sales taxes. YOU, as an out of state resident, are not using their services, roads, or courts…
I have no personal experience with it but according to the Washington state department of revenue site I found, they still have to charge sales tax to out of state residents even if the items are for use out of state. http://dor.wa.gov/Docs/Pubs/ExciseTax/RetailSales_UseTax/RetailSales.pdf
I know in Illinois now, there is a form you are supposed to file every year for everything you bought through mail order/internet from out of state that was not taxed at the Illinois rate.
A lot of states are passing laws now to try and keep sales tax in their state. With the spread of internet purchases, a lot of sales tax revenue is getting lost when companies sell out of state.
Bryan
All the Seattle retailers I have dealt with - I travel to Seattle a few times a year - are very aware of the agreement (law?) not to charge sales tax to anybody with an adoining state driver’s license for merchandise being taken out of Washington. If I even hint I’m from Alaska, the sales tax is dropped immediately. The agreement definitely applies to Alaska, Oregon, and Montana (I know Montana doesn’t touch Washington, Idaho is in between) - all states with no state-wide sales tax.
Maybe somebody that knows more can speak more intelligently about this. I do know that my Alaska drivers license has been a boon for my Seattle shopping sprees - no sales tax. And Seattle likes having that Alaska business that they have historically had, so the relationship continues.
my 2 cents
Sorry, but the paragraph on page 3, bottom left of that document says the exact opposite - that all goods delivered to buyers outside Washington are EXEMPT from the Retail Sales Tax.
Mike Tennent
If a retailer collects the appropriate tax and sends it to the Washington State Dept of Revenue, the the state is happy. If the retailer does not collect the appropriate sales tax, then the retailer is liable for the tax and the state is still happy. Retailers do not want to be liable for someone’s sales tax. By the way, Seattle’s sales tax is higher than most any other location in the state.
Mike - I read that document and concluded the same thing. I checked with several WA state hobby shops and they verified that they do not collect sales tax for out of state mail order. The owner of the business called the WA Dept of Revenue and got 2 out of 3 answers that said do not collect sales tax! Typical government lefthand does not know what the right hand is doing!
Jim
Yeah??? Well…don’t go into business in Washington state and buy office equipment in ANOTHER state!! Think you don’t have to pay WA state tax on something purchased elsewhere?? Guess again!! A tax audit in 1999 nailed me for back taxes due on some computer equipment and office furniture I purchased through the mail or internet. With penalties and interest it all came to about $300.00…bummer!!
It’s not exclusive to Washington, many states that have a sales tax have that law - if you buy it out of state, you’re still required to pay your own state tax. Obviously, it’s difficult to collect since it’s self-reporting and as you unfortunately discovered, an audit is usually how it’s found.
Mike Tennent
Keep track of your purchases. I don’t know if your state yet has the law requiring you to report on the state income tax form the amount of out of state purchases but if not, it soon will.
It is a matter of time until tax is charged for out of state purchases in every state, the delay is working out the collection mechanics.
In Ohio not only are you responsible for paying tax on out of state purchases, the instate sales require the merchant to charge the tax amount collected in the county where the goods will eventually reside. To make this clear, if you live in Cincinnati and buy something in Columbus the Columbus merchant must charge the tax rate currently in force in Cincinnati even though the sale was not made in Cincinnati.
I’m paying 9.75% total here in Tn.(the city is using their portion of the money to buy new cars and cell phones for it’s city employees)
Looks like it’s time for another revolution! Good thing we still have our guns.