Buying Advice Out of State Sales Tax Confusion

[MilersoPisa]

It's possible to avoid sales tax anyway, but there's a need to know all the states in a deal, laws, etc. That's so exhausting..and seems not right. Our government gonna tax almost every human activity because they like to control everything. It's a disaster for honest citizens who work, work and work to make this place better. I'm currently owning an online store, and I feel a lot of pressure from the tax agents and our "caring" government. But I'm still trying to evolve. For example, I've recently implemented deal tracking software to track my deals and necessary data. And my sales numbers have increased thanks to this software. Private developers have done more good for me than the government even could.

 

[Torvy]

It's possible to avoid sales tax anyway, but there's a need to know all the states in a deal, laws, etc. That's so exhausting..and seems not right.

It is not always 'not right'. Legislators put policies in place to encourage or discourage certain behaviors or practices. In Texas, agriculture is encouraged, so there is an available Ag exemption from sales tax. There are steps to take, but it is all above board. On the other hand, if you buy non-exempt items online from out of state and they don't collect sales tax, you still owe the state the 'use' tax.

I never quite understood the legal theory behind a state charging taxes across state lines. If I drive to OK and buy something at Wal-Mart (or wherever), I pay sales taxes to OK at checkout. If I bring those items back to Texas to use them, I don't have to pay again. If I buy online from Wal-Mart and (hypothetically) they didn't charge me sales tax, now I owe the state.

 

[paulfun9]

People trying to cheat the system is why honest people have to pay more.

No! Poor politicians and people who let the politicians waste our money is why honest folks have to pay more!

 

[bdhsfz6]

In some states, including mine, sales tax on major purchases is tax deductible and does not require itemizing deductions on your tax return.
Not as good as avoiding the tax altogether but it does help.

 

[Torvy]

In some states, including mine, sales tax on major purchases is tax deductible and does not require itemizing deductions on your tax return.
Not as good as avoiding the tax altogether but it does help.

I'll do you one better. My state and a handful of others doesn't tax your income along with the sales. So, in effect, compared to PA, 100% of my tax is deductible. PA sales tax is about 2% points less than TX, but TX income tax is 100% less than PA. This is on top of the fact that TX does not tax tractors for AG use.

 

[bdhsfz6]

I'll do you one better. My state and a handful of others doesn't tax your income along with the sales. So, in effect, compared to PA, 100% of my tax is deductible. PA sales tax is about 2% points less than TX, but TX income tax is 100% less than PA. This is on top of the fact that TX does not tax tractors for AG use.

In my next life, I'll reside in Texas!

 

[hornett22]

Sales and Use Tax Information

Scroll down to "Frequently asked questions about sales and use tax", then, "Out-of-state purchase FAQ's", then, "What if I pay sales tax to another state?

It reads:


What if I pay sales tax to another state?

Maryland grants a credit for sales tax paid to another state up to the amount of Maryland's six (6%) percent sales and use tax liability.

For example, if you paid a four (4%) percent sales tax to another state, you would be liable only for the difference, or two (2%) percent Maryland sales and use tax when you brought the property into Maryland. If you paid a six (6) or higher percent sales tax to another state, you would not be liable for Maryland sales and use tax when you brought the property into Maryland.

So, yes, you have to pay tax, no you don't have to pay double. If PA sales tax is over 6%, and you pay it, you don't owe Maryland anything. If you pay PA less than 6%, then you owe Maryland the difference between 6% and what you actually paid in tax to PA.

This is how it was when I bought my motorcycle out of state.

 

[hornett22]

In my next life, I'll reside in Texas!

Most states don't tax them for ag use if you have ag exemption

 

[IndyJay]

No! Poor politicians and people who let the politicians waste our money is why honest folks have to pay more!

Muh... but what about "fair share"?

 

[finn1]

I'll do you one better. My state and a handful of others doesn't tax your income along with the sales. So, in effect, compared to PA, 100% of my tax is deductible. PA sales tax is about 2% points less than TX, but TX income tax is 100% less than PA. This is on top of the fact that TX does not tax tractors for AG use.

My FIL had a place in Texas. His message was that, when you look at all the taxes and use fees, it’s about a wash between Texas and his other home in Michigan.

When comparing, you can cherry pick to make one look better or worse, but all in, it takes money to support roadies, fire departments, police, water and sewer systems, and school systems.

States with low income taxes, for example, may have lousy public schools, meaning you have to pay for private schools.

It’s largely a wash.

Just saying...