Out of state tax?

Ok I bought a rifle online & out of state from a gun shop in AZ. and I live in MO. we agreed on a price with shipping extra of $35.00. A few hours later I get an email from the guy charging me out of state sales tax of $67.10 is this against the law to charge tax to someone out of state for a purchase?
I have bought other rifle's out of state before & have never been charged sales tax.What are your thoughts?

First I've ever heard of that. Doesn't sound correct.

If the seller is "big enough," the seller must remit sales tax to the state where the customer resides. The only way I can keep up with this is through my ETSY account. Fortunately they take care of that when a sale is made. They've listed the following states that require the seller to remit sales tax, followed by the date the law kicks in. The list grows. From the ETSY website:

Based on applicable tax laws, Etsy will calculate, collect, and remit sales tax for orders shipped to customers in the following state(s):

Washington
01/01/2018

Pennsylvania
04/01/2018

Oklahoma
08/01/2018

Minnesota
10/01/2018

Connecticut
02/01/2019

South Carolina
02/01/2019

Iowa
02/01/2019

South Dakota
03/01/2019

New Jersey
04/01/2019

District of Columbia
04/01/2019

Idaho
06/01/2019

New York
06/01/2019

Alabama
07/01/2019

That being said, I do not see Missouri on the list. Hmmmm . . . .

Years ago, I would order stuff from Cabela,s and not be charged sales tax. When they opened a retail store in Missouri, I started getting charged sales tax on my orders. I think the Missouri sales tax is charged on anything you order out of state if the business has a retail outlet in Missouri.

I thought a company could only charge you sales tax if they had a "brick and mortar" presence in your home state?

No, you should not have to pay sales tax.

South Dakota v. Wayfair opened the door to internet sales tax even if the store isn't located in your own state.

It was never against the law for an out of state business to charge sales tax, the law was businesses werent required to collect tax to from an out of state customer. Then it was the responsibility of the customer to pay the required tax to their own state of course no one did or does.

After the supreme court decision laws were passed by respective states requiring businesses to collect tax for the state the customer resides in.

It looks as though missouri was working towards passing an internet sales tax law this spring. Maybe it passed.


https://fox2now.com/2019/04/09/missouri-house-advances-bill-to-collect-online-sales-taxes/

When online ordering started taking of a few years back, many states started to worry that sales tax revenues were going to take a big hit. Many states started to require collecting sales taxes on all purchases whether they were sales in state or out of state. It seems to vary among states.

https://www.nolo.com/legal-encyclopedia/50-state-guide-internet-sales-tax-laws.html


State laws are changing and there is talk of a Federal law that might over turn some state laws. I think he does not have to collect Mo tax at this time but will have to in the future, but, I am not a lawyer.

Thanks for the info tjm and Steven.

According to this source Mo currently has 8 bills in the legislature pertaining to remote sales tax, https://www.salestaxinstitute.com/resources/state-notices-resources-for-remote-sellers

Thanks guy's I'll be calling the owner when he opens today to plead my case.

I guess there is also the possibility that his state may require tax on all sales through his business regardless of where his customer lives.

The days of skirting sales tax through internet purchases is pretty much coming to an end.

I just talked to the owner and he said that his new guy did not know about out of state sales tax, he said he will reimburse me 100% of the sales tax that I was charged.
Good deal

If no refund had been issued, in my opinion, I would have further researched the web to see if a better price was out there, and if so, cancelled the order. These website sellers are collecting a sales tax with the likely result of them pocketing the sales tax and never forwarding the collected taxes to the states that require them to.
I once made an online purchase and was charged a sales tax, after asking the seller to provide a tax id so I could verify it, they never responded and I promptly cancelled the order.
Anymore, with the collection of sales tax and shipping, your more likely to find the same or better price locally, of course unless you live in the sticks or are unable to locate item locally.

I sure like living in a no sale tax state

Requiring the collection of sales tax for the state where the buyer resides will drastically reduce the options that the buyer has. With the complexity of dealing with every state and special districts within some states, many (I think most) small businesses will be driven out of business. Only the big outfits like Amazon and WalMart will be able to afford the systems that determine the tax rate by zip code and then allocate it to the proper account and submit it to the proper state. I know in NC we have a state wide rate as a base but some counties have assessed a local tax on top of the base rate. Merchants in those counties collect the higher rate at their brick and mortar stores regardless of where the customer lives.

Telling the merchant they have to know and collect the appropriate sales tax rate based on where the customer lives will turn retail business on it's head. And this is exactly what requiring the collection of sales tax on internet sales would require.

Keeping up with the tax rates in all 50 states and special districts within those states would be a huge undertaking and expense to any business and would certainly affect competition for the consumers dollar.

He probably was unaware of your states position and it automatically come up on the bill. I know Ebay implemented this on many states and it is tacked onto their bill automatically. Just one more thing to slow/hinder sales down even more.

My zipcode includes two city governments and a big chunk of outside the city area, the seller would have to go street by street, mailbox by mailbox and even then would likely end up wrong.

It's actually quite easy to figure sales tax for an out of state sale where the state requires the seller to remit sales tax. Every state has a website where the seller can go to punch in the zip code and the percentage comes up automatically. Works fine for small businesses that have time to track every order. I don't know how the larger ones do it. Must be an app thing. I'm still into writing up invoices and scanning them to email back to the customer. So not a big deal here. Plus there are just so many states that have jumped on this wagon.

If a business has stores in your State say Bass Pro or a business has done a certain amount of sales to a State they are required to collect tax, small business Mom and Pops can get away with it if they don't do a large amount of sales.

So any city or county sales tax doesn't apply to remote sellers?

Yes it does. Punching in the zip code will determine the percentage of the sale.

True . . . . UNLESS they've done a show in that state and had to register their tax ID with that state. Then they're "supposed to" collect and send taxes for all sales, not just the show where bigger bucks are earned.

As this issue snowballs with more states jumping in here (you can see how many jumped on just this year from my first post) the Feds will eventually step in and make a one size fits all. My opinion anyway.

Now Wisconsin has a whole different approach. Out of state retailers are not yet required to remit sales tax collected from WI residents (unless they have a brick/mortar inside WI). Instead, WI residents are required to remit sales tax to the WI Dept of Revenue based on property the WI resident purchased outside Wisconsin and brought into the state without having paid sales tax on it.

https://www.revenue.wi.gov/Pages/FAQS/pcs-diff.aspx

Idaho's law is the same. Idaho residents are required to pay Idaho sales tax (6 %) on all out of state purchases. It is called a "use tax". There is a line for it on the state tax form.

Very few people do that and the state does not audit returns for that item, as a general rule.

Same here in NC. There is a USE Tax line item on the state income tax. You can calculate the actual if you track your purchases or there is a formula based on your adjusted gross income. I just use the formula as I do not keep track. For the amount I have to pay, it is not worth the trouble of tracking purchases.

But hearing most folks talking about out of state purchases, I get the feeling that most folks do not pay the USE Tax.

Give the states time and they will figure out how much revenue they are losing and start going after folks. Would be easy enough to use credit card records to establish the tax liability.

Chances are he does not have a MO state license to collect MO state sales tax.