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Sales tax on internet purchases

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nolosoft
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« on: February 04, 2010, 02:50:16 pm »

Can anyone explain how it works with online purchases and sales tax? Do you need to pay sales tax on the stuff you buy online? Is it legal for the seller to charge sales tax?
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« on: February 04, 2010, 02:50:16 pm »

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porsche
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« Reply #1 on: February 05, 2010, 08:23:48 pm »

Sales tax has to be paid regardless of where you buy, whether it is at a store or on-line. Some merchants charge the sales tax for you. If they don't you have to calculate the sales tax yourself and pay it to uncle Sam when you do your annual tax return.
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nolosoft
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« Reply #2 on: February 06, 2010, 10:51:15 am »

Important to say that we are talking about state tax return not the federal one. Sales tax is collected by the state not by the feds.

For example, Wisconsin tax return includes sales tax on line 36

Wisconsin income tax return form 1
Line 36
Sales and Use Tax Due on Out-of-State Purchases

If you made any taxable purchases from out-of-state firms in 2009 on which sales and use tax was not charged, you must report Wisconsin sales and use tax on these purchases on line 36 (assuming the goods you purchased were consumed in Wisconsin). Taxable purchases include for example electronics, clothing, computers, CD/DVD, artwork, antiques, books, etc.
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porsche
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« Reply #3 on: February 06, 2010, 10:54:29 am »

Correct, here is an example of sales tax on internet purchases:

You purchased a laptop for $500 from online store. No sales and use tax was charged. The laptop was delivered in a county with a 5.5% tax rate. You
are liable for $27.5 sales tax ($500 x 5.5% = $27.5) on this purchase. In case of Wisconsin, this would be reported on line 36.
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apapunas
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« Reply #4 on: February 08, 2010, 04:52:27 pm »

It is not only legal, but it is required in many cases. If the seller has "nexus" in your state (nexus = type of presence (a retail store or as simple as a single employee)), that seller is required to charge the appropriate sales tax and remit that amount to your state taxing agency.
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Raykirk
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« Reply #5 on: September 20, 2010, 03:27:07 am »

It depends on the location, if you are in the same state, the purchaser must pay the tax. Most of the e-commerce businesses websites does not have a location, which means they are not required to collect sales tax. That's what I've noticed when I do online shopping.


computerseo.com
« Last Edit: September 24, 2010, 03:48:37 pm by Raykirk » Logged
nolosoft
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« Reply #6 on: September 21, 2010, 10:22:53 am »

I am not sure, but are'n there some states that do not collect sales tax? I think Alaska or some of those upper states does not collect sales tax, so if I as a purchaser find out they do not collect tax, it means I do not have to pay it. (?) Not sure.
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