Model Railroading > State Sales Taxes on Out of State Customers

I just took delivery by UPS today of a few MTH hopper cars that I purchased from a store in Virginia. I am from Pennsylvania. When I opened the box and looked at the invoice, low and behold the store in Virginia charged me $8.53 for Virginia state sales tax. Is this something new for VA? The purchase was made by phone not by E-mail. Does anyone know anything about this practice? I have contacted the store and I am waiting for them to return my call.

Jim

As a Virginia resident, I can tell you that merchant made a mistake. He owes you a refund on those charged taxes...

If he fails to refund it, be sure to post the store name here so that others may avoid it...

- BCM

There has been a furor over states wanting to
charge tax for out-of-state purchases, mainly due to internet sales robbing local retailers of sales and hence tax revenue. I have heard that a few states are actually requiring merchants to collect taxes from out of state buyers, and they are being contested, but I cannot remember what states they were.

Buying in Calif. requires sales tax for most adjacent states except Oregon, which has no state sales tax..

Thanks everyone. I have contacted the store and I am awaiting their reply.

I buy my train needs from stores all around this country and have never before been subjected to being charged state sales tax from those stores for their states. I buy my trains from stores that offer me the lowest price, not to circumvent the Pennsylvania state sales tax. I have found over the years that stores in Pennsylvania who sell trains have always had higher merchandise prices and that is why I go elsewhere. The state of Pennsylvania has always been the worst state for individual and property taxes. A disgrace when you consider that it has the SECOND highest population in this country of people who are retired. They kill us retirees with school property taxes.

Jim

I hope that it was an honest mistake by the store. I keep thinking that as soon as a politician figures out how to get tax on internet sales it is gonna happen. And next it will cover all sales.

I live in Oregon and there is no sales tax here. I have never been charged tax on a mail/phone order from any state. When I go to California and the purchase gets close to $100 I ask what the shipping charges are and have it mailed home. I have never ever had a merchant let me walk out the door with an untaxed purchase even though they knew I was from out of state. Washington (state not D.C.) is a different story. The store, at their option, may honor an Oregon drivers license and not charge tax. If the state audits the store and tax was not charged the sales slip needs the out of state license number on it. Almost all Washington stores (not just hobby shops) have honored my license and it is quite routine for most of them. Restaurants do not do this.

jb

As a follow up, the shop in VA called me this morning and apoligized at their mistake. Said they would credit my account. Everything is back to normal.

Jim

Good to hear that it was an honest mistake and has been gladly resolved...
- BCM

Most states with sales taxes are supposed to collect them on ALL sales (except tax-exempt).

the problem is that cross-state-line sales have been almost impossible to track and therefore it has become urban legend that they don\'t have to collect them. They do. On the other hand, crossing state lines is a federal issue and there are no federal laws available to sort out all the differences between states. Most states use a "point-of-sale" rule to collect state and local taxes, not where the buyer lives. If I live in the country but buy something in the city, I still pay the sales tax in the city. In my case, it adds about 1.5%.

Most states don\'t collect crosss-state-line taxes because there was/is absolutely no way to track them and balance out the differences on taxing laws between states. Prior to the internet there weren\'t enough $$ involved to pursue it.

my opinion (not that anyone asked...): all taxes applicable at the point of sale should be applied to all purchases. then the states with the most onerous taxes will have the free market punish them like it should....

Technically speaking, most states that impose a sales tax also impose a use tax. If you buy something from out-of-state, when you bring it into the state you have to pay a use tax, which is usually exactly the same rate as the sales tax. So, you should send Pennsylvania the equivalent of the Pennsylvania sales tax. (Some states allow you to reduce the use tax by the amount of sales tax you paid in the state of purchase--but far from all do this.)

Disclaimer. I am not an attorney and do not offer this as legal advice. I am not in the least familiar with Pennsylvania sales and use tax laws.

--George Birch