USA sales tax rules changed?

[Helmi]

Apologies if this question was raised before. My rolex AD in USA just informed me that the sales tax rules have changed and starting 1st of April 2019 they cannot waive the sales tax when shipping the watches to another state.

Is this correct? If yes, is there any other legal way to purchase the watch without paying the sales tax given that I don't live in USA. Same like Europe tax refund if the purchased good is taken out of country.

[Vamp]

Yup. This has already happened in my state! Sucks! I don't know about shipping to Europe though that could be different

[Dan Pierce]

Sorry can’t answer your specific question. But taxes have been included on the state where the item is delivered. End of the free ride from buying out of state.
dP

[blue997]

Yikes, that sucks. I live in New Hampshire where we have no sales tax, but I bought my Sub in Connecticut which has 6.35% tax I believe. Glad I found my Sub before this change

[DavePryor]

They’re supposed to collect for the state they ship to. So NH should be good.

Same with foreign countries.

[Vamp]

Originally Posted by blue997

Yikes, that sucks. I live in New Hampshire where we have no sales tax, but I bought my Sub in Connecticut which has 6.35% tax I believe. Glad I found my Sub before this change

No sales tax in NH! That's awesome!

[jsausley]

They're referring to the recent sales tax changes passed through Congress.

Basically the abridged version is that now it's up to the states to levy taxes on e-commerce, mail order and online sales, which is the way Rolex ADs were getting around this.

Now if you sell over a threshold ($100,000) to a specific state, that state can choose to make you pay taxes on those sales. This started getting rolled out in June and July of last year and is still not fully implemented in all 50 states. We have had to make some expensive changes to our computer system at work to correctly track and charge sales tax rates across multiple zip codes and states. It's very annoying.

[tyler1980]

Originally Posted by Helmi

Apologies if this question was raised before. My rolex AD in USA just informed me that the sales tax rules have changed and starting 1st of April 2019 they cannot waive the sales tax when shipping the watches to another state.

Is this correct? If yes, is there any other legal way to purchase the watch without paying the sales tax given that I don't live in USA. Same like Europe tax refund if the purchased good is taken out of country.

it wasn't legal before to not pay tax, it was just the honor system which didn't work obviously.

You can get state sales tax refunded if you are exporting it out of the US im almost positive. Since i live in the UK some salesperson at the galleria in Houston told me there was a tax free office there where i could handle that if i wanted.

Shipping state to state you owe taxes where it is going not where it was sold, that hasn't changed.
Shipping from texas to montana, there is not sales tax because montana doesn't have one. Shipping Texas to Florida, you pay florida sales tax

[Helmi]

Originally Posted by tyler1980

it wasn't legal before to not pay tax, it was just the honor system which didn't work obviously.

You can get state sales tax refunded if you are exporting it out of the US im almost positive. Since i live in the UK some salesperson at the galleria in Houston told me there was a tax free office there where i could handle that if i wanted.

Shipping state to state you owe taxes where it is going not where it was sold, that hasn't changed.
Shipping from texas to montana, there is not sales tax because montana doesn't have one. Shipping Texas to Florida, you pay florida sales tax

What he told me is that I have to pay the same sales tax no matter which state it is shipped to. But if it is up to the destination state then it is a different story. I will check with him again.

Regarding exporting out of country, Is this a rule? I mean to get tax-free? It will great to get more information on this if possible.

[Pongster]

In europe, there is no sales tax, but VAT. And exports are not subject to VAT in exporting country as a matter of principle since the input VAT and output VAT system would no longer be in play. In theory, it’s the importing country that would have yo impose VAT (if they follow the system).

In the US, it’s a sales tax. So taxed at point of sale. The shipping out of state was a loophole because it confuses the situation - where did sale happen? In state of store or in state of buyer? The seller can declare sale not made in its state so sales tax not applicable. There is usually a use tax in some states that should cover this loophole.

[tyler1980]

Originally Posted by Helmi

What he told me is that I have to pay the same sales tax no matter which state it is shipped to. But if it is up to the destination state then it is a different story. I will check with him again.

Regarding exporting out of country, Is this a rule? I mean to get tax-free? It will great to get more information on this if possible.

for example:


Requirements
Attention International Shoppers:
TaxFree Shopping offers one stop, quick and easy processing of your Texas sales tax refund. Pre-Register at www.TaxFreeShopping.com for a quicker processing time.

Step 1: Shop at any of our 6,000+ participating stores.
Step 2:
Process your refund at one of our 17 locations. (U.S. Citizens may only process at airport locations on the day of departure)

Bring:
Purchased Merchandise for inspection (new and unused)*
Original Receipts*
Passport
I-94/Entry Stamp/ESTA, Visa, IFE
Flight or Transportation Information.

$12 in sales tax required per physical store location.*

Step 3: Receive your refund by Cash, Check or PayPal, less our processing fee.


TBH sales tax is low vs Euoppean VAT, so its way less worth it IMO, Europe yes, for sure do it if you can.

Sales tax, VAT etc are a use/consumption tax. They are intended to be levied where they are to be used. Hence why the goods need to be "new" and "un used" to get a refund, as if you used them where you bought them you owe the tax.

[TonyD]

My local AD is a chain with 5 stores. They are all within about an hour of each other. One is in NH. I have NO idea how any of the other stores sell $1 of merchandise. I have a relationship with a few folks and they know the drill by now. I shop wherever I like and then when its time to buy they transfer it to the NH store for purchase. I bet the NH locations accounts for 75% of actual sales.

[DocHolliday]

It’s true OP but unfortunate. They are closing the loopholes on this. It’s always funny to see the tax police on here jump on members and call them out.


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[tyler1980]

Originally Posted by DocHolliday

It’s true OP but unfortunate. They are closing the loopholes on this. It’s always funny to see the tax police on here jump on members and call them out.


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its less that and more the fact that people who pay sales tax support essential services like police, fire, schools etc when your neighbor doesn't. It's annoying. The entire idea of a sales tax is you dont have to pay it if you dont buy stuff, so you can also afford it for a luxury watch.

IMO state and local taxes are way less abstract than federal taxes as you really see what they go towards. Federal taxes, ok i have no idea what im paying for most of the time

[Helmi]

Originally Posted by DocHolliday

It’s true OP but unfortunate. They are closing the loopholes on this. It’s always funny to see the tax police on here jump on members and call them out.


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The intention is not to break any rule or do something illegal. In fact I am not a USA citizen nor do I reside in USA. I am just a frequent traveller to USA either for business or leisure and happened to build relationship with an AD and I bought some pieces where I inform him that I will be in xyz state in that date and he ships the watch to my hotel. He never charged me sales tax and I take the watch with me back to my home country (export). With this change in taxation rules I am just trying to figure out if there is any way to continue doing what I used to do, if not then fine it is what it is.

[tyler1980]

Originally Posted by Helmi

The intention is not to break any rule or do something illegal. In fact I am not a USA citizen nor do I reside in USA. I am just a frequent traveller to USA either for business or leisure and happened to build relationship with an AD and I bought some pieces where I inform him that I will be in xyz state in that date and he ships the watch to my hotel. He never charged me sales tax and I take the watch with me back to my home country (export). With this change in taxation rules I am just trying to figure out if there is any way to continue doing what I used to do, if not then fine it is what it is.

if you dont owe it, dont pay it i agree with that totally. Same as when i leave the UK i dont owe the VAT anymore and im buying something for sure before i leave.

Ill pay to import it too, but thats a small fee comparative to the savings.

I still think you are exempt as its being exported. I am also exempt as a montanan resident from washington state sales tax as they have an agreement to zero rate tax and not even have to deal with refunds. I can buy a car in washington tax free with my montana drivers license and address and export it to montana for example since i dont live there. I dont live in Montana now obviously but if i moved back that would be the case or at least it use to be that way.

[Zuger]

I can confirm after speaking with an AD in NYC last week that out of state sales tax will no longer be waived. I don’t remember if he said starting March or April 1, 2019. You will be charged sales tax of the destination state. I guess it’s time to buy a house in Delaware...

[RichM]

Ship it to me in Delaware. No sales tax here either.

[startrolexendrolex]

What if you get a used watch from a trusted seller?

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[zelaya]

That really sucks. Guess I got my Sub at the right time. Need to contact my local AD

[GoingPlaces]

Question for the thread:

If you are a resident of a non-sales tax state (i.e. Delaware) can you avoid paying tax at the point of sale of do you still need to have it shipped home to avoid the tax?

[etp095]

Originally Posted by startrolexendrolex

What if you get a used watch from a trusted seller?

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I believe if they don’t have an actual Brick&mortar or online store, you won’t be charged. Just like me selling to a neighbor.

[77T]

Originally Posted by jsausley

They're referring to the recent sales tax changes passed through Congress.

Basically the abridged version is that now it's up to the states to levy taxes on e-commerce, mail order and online sales, which is the way Rolex ADs were getting around this.

Now if you sell over a threshold ($100,000) to a specific state, that state can choose to make you pay taxes on those sales. This started getting rolled out in June and July of last year and is still not fully implemented in all 50 states. We have had to make some expensive changes to our computer system at work to correctly track and charge sales tax rates across multiple zip codes and states. It's very annoying.

The real world impact is like you said, but not because of any legislation in Congress. It was because of the SCOTUS decision in South Dakota v. Wayfair.

The Supreme Court of the United States overruled the physical presence rule that for decades kept states from taxing remote sales. The court’s decision on June 21, 2018 allowed states to require a remote seller with “economic and virtual contacts” in the state (economic nexus) to collect and remit sales tax, even if it has no physical presence in the state.

As of the end of 2018, more than 30 states and Washington, D.C. have adopted economic nexus policies, so many retailer’s legal and Tax departments have adopted a broad rule to collect it now to avoid litigation.

Although the Wayfair case was triggered by an economic nexus law, the SCOTUS decision didn’t prevent states from pursuing remote sales tax revenue via different routes. All it did was to put an end to the physical presence rule.

States may also require marketplace facilitators to collect and remit sales tax on behalf of their third-party sellers. So eBay could be next.


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[77T]

Originally Posted by GoingPlaces

Question for the thread:

If you are a resident of a non-sales tax state (i.e. Delaware) can you avoid paying tax at the point of sale of do you still need to have it shipped home to avoid the tax?

You’d need to have it shipped to Delaware.


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[PossumDixon]

Even if you were buying out of state and not paying sales tax, you were likely violating the law when you brought it into your state, by not paying the associated use tax on the item. I know in my State, NJ, that if you buy stuff out of state, tax free, you still owe NJ use tax on the item. Nobody ever pays it, but the State does audit businesses from time to time and if they find stuff bought out of State, computer, supplies, etc, they assess the use tax, which is the same as the state sales tax.

Use Tax is owed by New Jersey residents and businesses that buy products out of state, online, or via the mail, and then bring the products to New Jersey or have them shipped here for their use. When you buy a taxable item or service in New Jersey, the seller collects New Jersey Sales Tax from you on the purchase. But if you buy the same item or service from a company located in another state, you may have to pay Use Tax to New Jersey, even if the out-of-state seller claims your purchase is tax free or collects sales tax for another jurisdiction.

Why Would You Owe Use Tax?

You owe Use Tax if you bought a taxable item or service outside of New Jersey and:

You didn’t pay sales tax of any kind, or
You paid sales tax to another jurisdiction at a rate lower than New Jersey’s.

[marc12]

Originally Posted by blue997

Yikes, that sucks. I live in New Hampshire where we have no sales tax, but I bought my Sub in Connecticut which has 6.35% tax I believe. Glad I found my Sub before this change

Same here!

[Norbert]

Thanks amazon!

[jonnyz1245]

Originally Posted by blue997

Yikes, that sucks. I live in New Hampshire where we have no sales tax, but I bought my Sub in Connecticut which has 6.35% tax I believe. Glad I found my Sub before this change

It would have no impact on you since you live in NH. In your example you buy the sub in CT and have it shipped to your home you will pay so sales tax.

[jcoltrane]

Many states have had use taxes for out-of-state goods in place for years, except most treated it like a loophole to not pay taxes. People shouldn't have been rewarded for this behavior, glad it's fixed.

[DocHolliday]

Originally Posted by tyler1980

its less that and more the fact that people who pay sales tax support essential services like police, fire, schools etc when your neighbor doesn't. It's annoying. The entire idea of a sales tax is you dont have to pay it if you dont buy stuff, so you can also afford it for a luxury watch.

IMO state and local taxes are way less abstract than federal taxes as you really see what they go towards. Federal taxes, ok i have no idea what im paying for most of the time

I see you are from Europe so you probably have a fundamental difference in ideology regarding taxes. I assure you I pay more than my fair share in sales tax with every single daily purchase I make. I also pay more than my fair share of federal taxes. I don’t generally view taxes as a good thing and some states share this opinion and have less or no sales tax or income tax.

We have different fundamental ideas about taxes and that’s fine. Also many of my “neighbors” pay zero taxes, and yet they still enjoy the benefits of all the tax funded services.

A one off purchase that confuses the tax code is not the fault of the consumer, it’s the fault of the state for not adapting to newer commerce practices. This is why they are correcting the laws to conform to newer e commerce and constant sales across state lines.


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