Savings on Sales Tax?

[Sbuckaroo]

I read stories on TRF of some excellent savings on Rolex watch purchase when buying from an out-of-state AD. Could you please explain what is the mechanism for doing this? does the buyer have to pay the full price and then get refunded the sales tax through submitting a claim somewhere? How does that work?

Thanks for your feedback.

[S``]

Officially, you're supposed to report your out of state purchases in your state tax return form. Unless your state have no Sales tax

[Sbuckaroo]

Originally Posted by Szer

Officially, you're supposed to report your out of state purchases in your state tax return form. Unless your state have no Sales tax

Many thanks Steve for the quick response. MD does have sales tax, so I guess it evens out?

But does the AD just not have you pay for sales tax if you reside in another state, or do you have to claim it somehow in the state where you bought the watch from?

[Dahaja]

Originally Posted by Sbuckaroo

I read stories on TRF of some excellent savings on Rolex watch purchase when buying from an out-of-state AD. Could you please explain what is the mechanism for doing this? does the buyer have to pay the full price and then get refunded the sales tax through submitting a claim somewhere? How does that work?

Thanks for your feedback.

I believe it would have to be shipped from the AD to the out of state address. Again, most should claim internet or out of state purchases, but I dont think most do. Even when you buy from internet sites and avoid tax, it still should be claimed.

[S``]

That's why i used the word "officially". AD is only responsible for sales tax collection in the state that the sales occurred.

Other than that you have to file it with your state taxes as reiterated by Dahaja

[Sbuckaroo]

Thank you both for the help, this is very useful.

[donas]

Also, this method only works if there is no store in whatever state it is being shipped....ie. I live in South Carolina and wanted a Jareeds to ship to Tenn and they would not due to Tenn having jareeds within the state.

Also, if you spend more than 10G in the store, they must file additional paperwork with Uncle Sam, so you most likely will be held accountable one way or another.

[Sbuckaroo]

Originally Posted by donas

Also, this method only works if there is no store in whatever state it is being shipped....ie. I live in South Carolina and wanted a Jareeds to ship to Tenn and they would not due to Tenn having jareeds within the state.

Also, if you spend more than 10G in the store, they must file additional paperwork with Uncle Sam, so you most likely will be held accountable one way or another.

Excellent points. Thanks!

[HARIVERA]

In my case, the State of Delaware does not have a State Sales Tax. therefore the AD has no process or method to collect from a sales taxes for another state. No Presents (i.e. PA), No tax collection for PA. But the folks on the site are correct in that you, the buyer, should claim and pay 'Use Taxes' (in PA the is 6%). But very few folks do.

[Dahaja]

Originally Posted by donas

Also, if you spend more than 10G in the store, they must file additional paperwork with Uncle Sam, so you most likely will be held accountable one way or another.

I believe this is only if you use cash, not a credit card or check.

[floater156]

Originally Posted by Dahaja

I believe it would have to be shipped from the AD to the out of state address. Again, most should claim internet or out of state purchases, but I dont think most do. Even when you buy from internet sites and avoid tax, it still should be claimed.

x2, I had mine shipped from my local AD to a different state and I did not pay any sales tax.

[w4rmk]

My local AD offered to ship the watch to a friend or family member in another state to save the sales tax. I thought - yeah right like I'd buy a new Rolex and not walk out of the store with it on my wrist!

[rr-nyc]

Originally Posted by donas

Also, this method only works if there is no store in whatever state it is being shipped....ie. I live in South Carolina and wanted a Jareeds to ship to Tenn and they would not due to Tenn having jareeds within the state.

Also, if you spend more than 10G in the store, they must file additional paperwork with Uncle Sam, so you most likely will be held accountable one way or another.

Thats for cash transactions only. Checks, wire transfers, credit/debit cards do not have to be reported

[rr-nyc]

Originally Posted by Sbuckaroo

I read stories on TRF of some excellent savings on Rolex watch purchase when buying from an out-of-state AD. Could you please explain what is the mechanism for doing this? does the buyer have to pay the full price and then get refunded the sales tax through submitting a claim somewhere? How does that work?

Thanks for your feedback.

Here in the US, local sales tax is not collected if you have the purchase shipped out of state however, if your state has a sales tax, you are obligated to report the purchase and pay your local sales tax. This is different than buying in Europe or anywhere that has a VAT. You pay the tax with the purchase and apply for a refund when leaving the country.

Stores try to promoted this as a savings but the reality is that it's not unless you live in the few states that don't have sales tax

[Sbuckaroo]

Thank you all very much for the really useful feedback.

[7TIIMES70]

Last watch I bought from an AD they let me walk out the store with watch and rest of set. They mail 'the watch' to an out of state address I have, but just sent a few booklets. Some will do this, others will want to ship everything out of state. Worth it when you're saving $500+.

[krlyuzh]

There are different ways of doing it. The right way is to go or call an out of state AD, they will then ship the watch to your BILLING address. If you have a relationship with the said AD, they might let you walk out with the watch itself and then send the box and papers separate as proof for THEM that it was sold out of state.

After all is set and done, at the end of the year you are SUPPOSED to claim your out of state purchase while doing you taxes. Now, whether or not you do it, is up to you obviously. However, technically you would be saving whatever different in sales taxes there is between your state and AD's state.

Then again, you can always buy from someone here where tax is included :)

[Ebruner]

Originally Posted by krlyuzh

Then again, you can always buy from someone here where tax is included :)

Thats not really legal either, states are very clear when you get a Sales Tax ID as a business.

Sales tax MUST be paid by the consumer, and not included or paid by the business.

You can cheat, but there is no "legal" way to avoid sales tax if the state you reside in collects sales tax.

-Eddie

[Dahaja]

I wonder how many people really track every Internet purchase they make and pay taxes on them? I doubt the percent is very high.

[Duc5150]

Not sure about your state, but if a buyer is resident in the State of CA, the buyer is required to file the necessary forms for out of state purchases and pay a "Use Tax" which is essentially equal to State of CA "Sales Tax".......FWIW

[HARIVERA]

In my State, PA the local sales tax is higher than the Use Tax! When we purchased the watches in DE, since the local AD has no method to collect PA taxes, no taxes were collected (regardless of payment method). And it would be up to me to report and pay the 6% Use Tax.......NOT!

[Tri-Tip]

Years ago, a female friend of mine bought a diamond pendant from Tiffany's here in Los Angeles. To save the sales tax, she had it shipped to a friend of hers in Delaware, and she was going to ship it back.

The friend asked if she could open and look at it, because she knew it was a spectacular piece. She opened it and found a diamond and ruby cross. She called my friend and said that she received the box and was there something she need to tell her. My friend asked why, and her friend said "Well, you're Jewish, but you ordered a diamond and ruby cross".

Turns out Tiffany's sent the wrong item. When she got it back from the friend in Delaware, she was able to take it into the store and exchange it for the correct item.

[zeuloa]

Originally Posted by 7TIIMES70

Last watch I bought from an AD they let me walk out the store with watch and rest of set. They mail 'the watch' to an out of state address I have, but just sent a few booklets. Some will do this, others will want to ship everything out of state. Worth it when you're saving $500+.

When I purchased my last watch they insisted to ship everything. I even suggested they ship my DJ which I was wearing instead but they would not budge!

I guess the wait made it that much better!

[BogeyFree]

Originally Posted by Dahaja

I wonder how many people really track every Internet purchase they make and pay taxes on them? I doubt the percent is very high.

Well let's be perfectly honest here - if anybody actually does that or tracks every purchase made out of state and then runs home and pays the taxes they're the biggest suckers on the planet. Ok so I said it. But of course that doesn't apply to me as I would never cheat the Government out of any money that they're entitled too

[changster]

Originally Posted by zeuloa

When I purchased my last watch they insisted to ship everything. I even suggested they ship my DJ which I was wearing instead but they would not budge!

I guess the wait made it that much better!

Same here as my AD will be shipping my 14060M out of state. I tried suggesting my AD to ship just the box but I think it might complicate things for insurance purposes. Just glad to save that almost $500 in taxes.

[rr-nyc]

Originally Posted by BogeyFree

Well let's be perfectly honest here - if anybody actually does that or tracks every purchase made out of state and then runs home and pays the taxes they're the biggest suckers on the planet. Ok so I said it. But of course that doesn't apply to me as I would never cheat the Government out of any money that they're entitled too

It's not every purchase you make out of state. It's purchases you have shipped to out of state (presumably to your home) to avoid paying the local sales tax of the purchase

[Tridor]

Another way to deal with it is to agree on a discounted price with the tax backed out. Then, the AD simply charges tax on the discounted amount and you're good to go. It's what's known as an "all in" price.