Sales Tax For Online Purchases

[Books4me]

Several years ago I heard someone on the radio say that you’re supposed to pay sales tax on online purchases. I never researched it to see if it was true until this year because I didn’t want to have to pay sales tax. Well, I finally researched it and it is true. So now I’m trying to pay sales tax on all of my past online purchases through the years. Some places like Amazon have record of my purchases so I can just print off the receipts. My question is, some things I bought I don’t remember how much I paid for them and I don’t have a receipt. From a moral standpoint, is it ok to just pay sales tax on the receipts I do have, and don’t worry about the rest?

 

[prstoessel]

Several years ago I heard someone on the radio say that you’re supposed to pay sales tax on online purchases. I never researched it to see if it was true until this year because I didn’t want to have to pay sales tax. Well, I finally researched it and it is true. So now I’m trying to pay sales tax on all of my past online purchases through the years. Some places like Amazon have record of my purchases so I can just print off the receipts. My question is, some things I bought I don’t remember how much I paid for them and I don’t have a receipt. From a moral standpoint, is it ok to just pay sales tax on the receipts I do have, and don’t worry about the rest?

It is incumbent upon the retailer - not the consumer - to collect and remit sales tax. If no tax is charged, you are not obligated to pay.

My understanding (the laws might have changed) is that retailers that do not have a physical presence in the state you reside do not collect sales tax. If you buy something from Wal-Mart .com, you have to pay sales tax because they have a store in every state. But if you buy something from Walla Walla Corp. who only has a location in California, but you are in Texas, you need not pay sales tax.

The laws are more complicated than that, I’m sure. That is why it is the retailer’s problem and not yours to solve.

 

[Marie682]

Where I live, there is something called “safe harbor” tax, which is based on your income. Most things that you buy under $1000 that weren’t taxed at the time of purchase are covered by this, and it’s reported on state income tax forms. You may have something similar where you live- I would check out your state tax information, because you might not have to add up all those receipts, and instead amend your tax forms.

 

[puzzleannie]

Several years ago I heard someone on the radio say that you’re supposed to pay sales tax on online purchases. I never researched it to see if it was true until this year because I didn’t want to have to pay sales tax. Well, I finally researched it and it is true. So now I’m trying to pay sales tax on all of my past online purchases through the years. ?

are you sure your information is correct? it depends on tax law in your state, and the state where the transaction is registered or deemed to happen, or from where it is shipped. For instance if you buy something on line from a company located in California, or the product is shipped from there, you might be charged tax from there, as well as your home state. Each state is different, and there a few places, California is one, where some municipalities also exact a sales tax.

DH’s job is programming on-line sales systems for companies to properly calculate sales tax, a job that keeps several people busy full time.

If you ordered from a reputable on-line business you paid tax at that time, unless you actually lied in response to the questions about residence etc.

I am assuming you mean retail purchases for your own use.

If you are talking about buying for resale there is a whole other set of rules, and you should have gotten that info from your accountant when you set up your business. If you are on that scale you need and accountant and tax adviser especially if your on-line business involves sales outside your residence state.

I would not advise spending any time, anxiety or effort trying to figure and pay past sales tax that was not collected unless you perpetrated deliberate fraud (lied about your residence or tax exempt status, for instance).

As general rule it is unwise to base tax and financial decisions on what you heard on the radio.

 

[1ke]

From a moral standpoint, is it ok to just pay sales tax on the receipts I do have, and don’t worry about the rest?

The retailer collects and remits sales tax. You do not.

You are being scrupulous.

 

[Books4me]

On this website window.state.tx.us/taxinfo/sales/faq_use.html under item number 3 it says, "Do I owe tax on goods purchased via mail-order catalogs or Internet merchandise?
Yes. A seller who uses catalogs or the Internet to sell goods is treated the same as any other seller of taxable items. If you purchase merchandise through a catalog or the Internet from a seller located in Texas, you owe Texas sales tax on the purchase. If you purchase merchandise through a catalog or the Internet from a seller located outside of Texas and use the taxable item in Texas, then you owe Texas use tax on the purchase. An out-of-state mail-order company or an Internet company may hold a Texas Sales and Use tax permit and collect Texas tax. If the out-of-state seller does not have a Texas permit or does not collect Texas use tax, the use tax is due and payable by the purchaser."

They’re calling it use tax instead of sales tax

 

[dafrenchman]

Sounds like Texas honest residents have some catching up to do.

Does Texas actively enforce this law? Seems they could look at Paypal / Credit card bills and get their money easily…

 

[LeafByNiggle]

Sounds like Texas honest residents have some catching up to do.

Does Texas actively enforce this law? Seems they could look at Paypal / Credit card bills and get their money easily…

Same in Michigan. If the seller did not collect the sales tax because he does not have a sales tax license for that state (because he has no presence there), then in most states the buyer is liable for use tax. In Michigan they offer 2 options. Either you can claim the exact amount of out-of-state catalog or Internet purchase and pay the use tax on it, or if you don’t want to keep all those records, you can pay a certain percentage of your adjusted gross income.

However, don’t immediately assume that you owe use tax for every item purchased over the Internet. If the seller has any offices in your state, he is obliged to collect the sales tax. Since amazon.com is so big, they have a business office in just about every state, so you can be pretty sure that your purchases from amazon.com have already been taxed.

 

[puzzleannie]

almost always if you try to order online (or by mail) from an entity that does not have a sales tax registration in your residence state, you will be told they cannot accept your order or ship it to your state. when I shopped more on line I got this all the time when we moved to Texas, that they just don’t ship here presumably because Texas laws are to onerous, or the direct you to an in-state site or entity that handles the product.

 

[newbie9]

I had this exact same dilemma in my state! I may have gone overboard in what I did, but I wanted to make sure I was fully caught up and could go forward paying the tax I now knew about. What I did was to add up everything I could find, I added 10 % to that for receipts that I couldn’t find, figured out the tax due,interest, and penalties by dividing the past years into sections of time, and wrote a letter explaining just what I did . They cashed my check with full and final payment written on it so I am now all caught up and feel much better with a clean slate

States really need to do a better job of implementing taxes like this. I think there are a lot of people who would pay this tax if they knew about it and/or if it was less burdensome to file. I think some states allow you to estimate your use tax by income if you don’t have all your receipts.