Paying Sales Tax on Out of State Purchases

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  • #1506680

    DaasYochid ☕
    Participant

    There’s been talk lately that all purchases, even from out of state retailers, should be subject to sales tax, collected by the seller.

    It does seem fair, because as it currently stands, certain retailers have an unfair advantage over others.

    The counter argument is that it is very difficult for retailers to maintain sales tax accounts in all states they ship to.

    What do you think?

    A related question, this one halachic: according to the technical dina d’mslchusa (state law in most states), a buyer is obligated to pay sales tax on out of state purchases whether or not the seller charged them. However, the vast majority of purchasers do not pay tax on these transactions (98-99%), and it’s likely that many aren’t even aware of this law.

    Is such a law, somewhat unknown, almost (or perhaps completely) unenforced, and overwhelmingly ignored, included in “dina d’malchusa dina”?

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    #1506685

    Joseph
    Participant

    Dina d’malchusa dina does not require one adhere to a widely disregarded and virtually unenforced law.

    Regarding the first question, I think every state should be limited to one flat sales tax that any out-of-state merchant should have to collect rather than force every mom and pop store in America to have to figure out sales tax for thousands of municipalities and jurisdictions across the country.

    #1506692

    DaasYochid ☕
    Participant

    Dina d’malchusa dina does not require one adhere to a widely disregarded and virtually unenforced law.

    I’m not saying you’re wrong, but do you have a source?

    rather than force every mom and pop store in America to have to figure out sales tax for thousands of municipalities and jurisdictions across the country.

    There is software which can figure it out for them. It’s expensive.

    I think the states and municipalities who want to collect the tax should subsidize the software. It will be well worth it for them.

    #1506694

    Joseph
    Participant

    The point regarding DDD I’m going off memory on a point I distinctly recall. I don’t have the source offhand.

    #1506730

    CTLAWYER
    Participant

    Point of Information…………………
    In many states, including Connecticut, the purchaser/importer of goods from out of state does NOT have a requirement to pay sales tax. Sales tax can only be collected for the state by the merchant. The purchaser has an obligation to report the purchase and pay USE tax. The rate is generally the same as sales tax. Years ago they would publish forms quarterly in the English newspapers to use to remit tax. Now it is a question on the state income tax form

    Having just completed income tax returns for many family members and many clients (including trusts) I find that less than 10% report any of such purchases.

    #1506738

    DaasYochid ☕
    Participant

    I’m not sure how calling it a “use tax” instead of a “sales tax” makes much of a difference to a layman, or halachically.

    The article I linked says 1-2% pay it.

    #1506750

    zahavasdad
    Participant

    New York DOES require you to pay sales tax on items purchased out of state and there is a line on your income for it, however it is widely ignore

    Most ecommece occurs on larger sites like eBay, Amazon, Wal-mart etc. those sites can collect the sales tax instead of the merchants who sell on them and that would collect the majority of the sales tax owed (B&H sells on eBay and Amazon so sales on those sites would be subject to sales tax collection, but sales on their own site would be harder to collect

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