How to Shop Online to Avoid Sales Tax
According to a 1992 ruling by the U.S. Supreme Court, you don't have to pay sales taxes when you shop out of state. This means that shopping online is a great way to avoid paying sales taxes, as your chances of buying an item from a merchant in a different state are great.
Other People Are Reading
Instructions
-
-
1
Look for a company that has no physical address in the state where you live. You will avoid paying sales tax when shopping online only if your purchases qualify as "out of state." You may be able to find the physical address of a store by visiting their website or by checking the shipping page.
-
2
Shop at resale places such as eBay or Half.com (see Resources below). Because these websites feature items mostly sold by individuals (rather than companies), sales taxes usually don't apply. Companies or corporations that sell on eBay may charge taxes.
-
-
3
Be aware of your shipping address. This is what decides where you will be charged taxes or not. If you have an alternate address, you may consider using it to avoid paying sales tax on an item.
-
4
Shop at websites that have their online business separate from their in-store businesses. This is the case of companies such as Barnes & Nobles and Borders. These companies are not required to charge sales taxes to their customers because of a special arrangement with the government.
-
5
Look online for information on how sales tax is handled by any particular company. You may find that the business charges only for large purchases, such as vehicles or computers. This depends on laws in their particular state, so check in advance.
-
1
Resources
More Like This
Comments
-
This article gives ways to "avoid" sales tax, but it is not actually legal. The 1992 ruling that is cited only frees certain online businesses from "collecting" sales tax; it does NOT free consumers from the obligation to pay sales tax. In fact, the ruling is less convenient for the consumer, because in fact they must keep track of and pay any uncollected sales taxes themselves. Your state government can audit you at any time, and require you to pay all unpaid sales taxes going back several years at least, plus penalties. Do yourself a favor, and "avoid" the advice of this article.
-
Nycole Armon
Feb 20, 2010
The previous commenter makes a valid point; however, majority of people who don't understand tax law fully don't know that there even IS a use tax. My guess is that the author of this how-to didn't know about use tax as well. Use tax is a good concept, but since majority of people don't know about it/wouldn't report it anyways since they think they won't get caught...then I think they need to refine how they plan to collect from people on smaller purchases. -
fairshare
Jun 26, 2009
This article is full of misinformation. The 1992 Supreme Court decision referred to only freed interstate sellers from the obligation to charge sales tax to customers located in states in which the seller had no physical presence. The purchaser, however, remains legally obligated to self-pay the equivalent "use tax" on the purchase; this is also true if you buy something in a state that doesn't impose a sales tax and bring back into a state that does. Most states now have lines on their income tax forms so that you can self-pay the use tax only once per year. In short, the author is effectively counseling people to break the law. It is true that you are unlikely to be caught if you fail to self-pay use taxes on small items, but states are increasingly sharing information to try to collect on large purchases. If you buy a $5,000 diamond online, the state where the online company...
