# Does anyone really pay sales tax on online purchases? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 17, 2011, 12:13am UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647 "2011-02-17T00:13:36Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Disheavel](https://avatars.discourse-cdn.com/v4/letter/d/e274bd/32.png) [@Disheavel](https://boards.straightdope.com/u/Disheavel)\ **Post date:** [February 17, 2011, 8:06pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/21 "2011-02-17T20:06:18Z")
> [@Mama\_Zappa](#): > > I’m actually surprised states aren’t going after the big-time online retailers for just this sort of thing. [Texas went after Amazon](http://online.wsj.com/article/SB10001424052748703961104576148634038574352.html), so Amazon is removing their center and jobs from the state so states are going after them. But if they aren’t going to go after their own citizens for breaking the law, I don’t give the states much pity or agreement. ---
**Author:** ![DoctorJ](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doctorj/32/2904_2.png) [@DoctorJ](https://boards.straightdope.com/u/DoctorJ)\ **Post date:** [February 17, 2011, 8:34pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/22 "2011-02-17T20:34:28Z")
I buy a lot of stuff online, but the overwhelming majority of it comes from Amazon, which charges me sales tax because I live in KY where they have two large shipping facilities. ---
**Author:** ![elfkin477](https://avatars.discourse-cdn.com/v4/letter/e/a9a28c/32.png) [@elfkin477](https://boards.straightdope.com/u/elfkin477)\ **Post date:** [February 17, 2011, 9:11pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/23 "2011-02-17T21:11:31Z")
> [@Disheavel](#): > > [Texas went after Amazon](http://online.wsj.com/article/SB10001424052748703961104576148634038574352.html), so Amazon is removing their center and jobs from the state so states are going after them. But if they aren’t going to go after their own citizens for breaking the law, I don’t give the states much pity or agreement. Amazon was actually one of the places I was thinking of when I asked how states justify demanding sales tax when their residents buy from places located in states without sales tax, because one of the distribution centers is located in New Hampshire. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [February 18, 2011, 1:06pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/24 "2011-02-18T13:06:09Z")
> [@rachelellogram](#): > > Gotcha. Those sound like either big-ticket purchases or cases in which sellers were engaging in fraud. I was just wondering if it was something the “little guy” should concern himself with. I don’t yet see any evidence that this is so. If its big enough, yes. Apparently states have started querying some online retailers for their records. They won’t go after someone who bought three books from Amazon, but they might go after someone who bought books from Amazon all year. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [February 18, 2011, 1:30pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/25 "2011-02-18T13:30:24Z")
> [@elfkin477](#): > > Amazon was actually one of the places I was thinking of when I asked how states justify demanding sales tax when their residents buy from places located in states without sales tax, because one of the distribution centers is located in New Hampshire. Traditionally, its a “store front” that determines nexus. A distribution center hasn’t been sufficient. I bet that changes. And it isn’t where you buy from, its where its used. i.e. Best Buy or WalMart or Target have nexus in all states - so if you order online from WalMart, it doesn’t make any difference which distribution center it ships from - WalMart has to charge you sales tax for the state it ships to. I also bet states are going to get a lot more aggressive over this. There is a budget shortfall and no political will for new or raised taxes (although there has to be some of that - in addition to budget cuts) - better at least enforce the revenue generators you already have on the books. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [February 18, 2011, 1:51pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/26 "2011-02-18T13:51:46Z")
Another thought: What about things a person in state A orders, as gifts for person in state B? Obviously if I buy something shipped to me in state A, I should pay the “use tax” to state A (where I live). And if I pop down to a nearby store for a gift, to send to my relative in state B, state A will get its cut. But if I’m sending something to a relative in state B - and it’s sent direct from Amazon in state C to state B - never passing through or even NEAR state A… who should get the tax? Am I supposed to file a use tax return with state B? is my relative supposed to declare his gift somehow? ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [February 18, 2011, 1:53pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/27 "2011-02-18T13:53:52Z")
And, there’s the maddening task of figuring out what’s taxable and what isn’t. Some states are worse than others for that. Flashing back to when I was a cashier in Pennsylvania 30 years ago, the rules were MADDENING (this was before computerized registers). Underwear: tax-free. Bathing suits: taxable. Books: taxable. Bibles: not. Groceries: tax free. Restaurant foods: taxable. Prepared foods: who knows… Medications: tax-free. Toiletries: taxable. OTC meds: dunno. Medicated shampoo: dunno. ---
**Author:** ![C3](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/c3/32/3108_2.png) [@C3](https://boards.straightdope.com/u/C3)\ **Post date:** [February 18, 2011, 1:58pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/28 "2011-02-18T13:58:59Z")
> [@Dangerosa](#): > > If its big enough, yes. Apparently states have started querying some online retailers for their records. They won’t go after someone who bought three books from Amazon, but they might go after someone who bought books from Amazon all year. A federal judge ruled last October that Amazon did not have to release information about customer purchases to the state of NC, because it would violate the customers’ First Amendment rights. For now, it seems like NC has dropped the idea of going after revenues this way. I think the system in NY that \*\*doreen \*\* described sounds like a reasonable way to collect these taxes. Otherwise, I just think it’s unlikely that most people are going to keep meticulous records of their small online purchases all year (a book here, a t-shirt there) in order to pay a tiny amount of tax on them. NC says that they’ve been shorted $50 million in tax revenues from Amazon alone since 2003. That tells me that there are a lot of people who are ignoring this law. ---
**Author:** ![Machine\_Elf](https://avatars.discourse-cdn.com/v4/letter/m/82dd89/32.png) [@Machine\_Elf](https://boards.straightdope.com/u/Machine_Elf)\ **Post date:** [February 18, 2011, 3:23pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/29 "2011-02-18T15:23:59Z")
> [@C3](#): > > A federal judge ruled last October that Amazon did not have to release information about customer purchases to the state of NC, because it would violate the customers’ First Amendment rights. First amendment? 😕 Not sure how that applies. Maybe you meant [Fourth amendment](http://en.wikipedia.org/wiki/Fourth_Amendment_to_the_United_States_Constitution) (which prohibits unreasonable searches/seizures)? ---
**Author:** ![C3](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/c3/32/3108_2.png) [@C3](https://boards.straightdope.com/u/C3)\ **Post date:** [February 18, 2011, 3:30pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/30 "2011-02-18T15:30:58Z")
> [@Machine\_Elf](#): > > First amendment? 😕 Not sure how that applies. > > Maybe you meant [Fourth amendment](http://en.wikipedia.org/wiki/Fourth_Amendment_to_the_United_States_Constitution) (which prohibits unreasonable searches/seizures)? No, the argument was that people’s specific purchasing habits would be revealed to the government. [Here’s an article](http://www.pcworld.com/businesscenter/article/207772/amazon_cites_first_amendment_in_north_carolina_tax_case.html) on the subject. [QUOTE=article] Last year, the North Carolina Department of Revenue asked Amazon for information regarding products sold to people in the state. Amazon complied with the request, which it called vague, by sending the state a detailed list of the products, including book and video titles. North Carolina then asked for customer names. But offering that information would conflict with the First Amendment because it would allow the government to match those names with potentially sensitive information including what kinds of books people are reading, Amazon argues. [/QUOTE] ETA: this article was written before the final ruling, which was in Amazon’s favor. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [February 19, 2011, 12:16am UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/31 "2011-02-19T00:16:02Z")
> [@Mama\_Zappa](#): > > Another thought: What about things a person in state A orders, as gifts for person in state B? > > Obviously if I buy something shipped to me in state A, I should pay the “use tax” to state A (where I live). And if I pop down to a nearby store for a gift, to send to my relative in state B, state A will get its cut. But if I’m sending something to a relative in state B - and it’s sent direct from Amazon in state C to state B - never passing through or even NEAR state A… who should get the tax? Am I supposed to file a use tax return with state B? is my relative supposed to declare his gift somehow? I don’t think anyone. You don’t owe state B any tax- you aren’t a resident. And the item never went to state A, so they don’t get any tax. It’s like you bought the gift in a state with no sales tax and then brought it to state B. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [February 19, 2011, 12:23am UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/32 "2011-02-19T00:23:22Z")
> [@C3](#): > > No, the argument was that people’s specific purchasing habits would be revealed to the government. [Here’s an article](http://www.pcworld.com/businesscenter/article/207772/amazon_cites_first_amendment_in_north_carolina_tax_case.html) on the subject. > > ETA: this article was written before the final ruling, which was in Amazon’s favor. But if it was based on the first amendment, then the ruling wouldn’t cover anything that was not speech, and probably wouldn’t even cover book purchases if the titles weren’t requested. And I think NY’s method is fine- except that since people ignore it I expect a modification of North Carolina’s approach. I expect NY or some other state to try to get very vague information from Amazon - just how much a particular person bought and had shipped to NY - no titles or details. ---
**Author:** ![River\_Hippie](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/river_hippie/32/26_2.png) [@River\_Hippie](https://boards.straightdope.com/u/River_Hippie)\ **Post date:** [February 19, 2011, 2:41am UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/33 "2011-02-19T02:41:48Z")
I voluntarily pay all the tax on my online purchases because it’s my duty as a citizen. ---
**Author:** ![Rigamarole](https://avatars.discourse-cdn.com/v4/letter/r/77aa72/32.png) [@Rigamarole](https://boards.straightdope.com/u/Rigamarole)\ **Post date:** [February 19, 2011, 2:48am UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/34 "2011-02-19T02:48:35Z")
> [@rachelellogram](#): > > Meh. It’s for a good cause (stamping out ignorance!). My point being that this is one area where ignorance could really work to your advantage. 😛 ---
**Author:** ![C3](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/c3/32/3108_2.png) [@C3](https://boards.straightdope.com/u/C3)\ **Post date:** [February 19, 2011, 3:26am UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/35 "2011-02-19T03:26:36Z")
> [@doreen](#): > > But if it was based on the first amendment, then the ruling wouldn’t cover anything that was not speech, and probably wouldn’t even cover book purchases if the titles weren’t requested. :shrug: I simply report. For some reason, NC insisted that they needed both the customers’ names and the details of each purchase. In the final ruling, the judge stated: > [@](#): > > “The First Amendment protects a buyer from having the expressive content of her purchase of books, music, and audiovisual materials disclosed to the government,” Judge Marsha Pechman wrote. “The fear of government tracking and censoring one’s reading, listening, and viewing choices chills the exercise of First Amendment rights.” ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [February 19, 2011, 4:15am UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/36 "2011-02-19T04:15:39Z")
> [@C3](#): > > :shrug: I simply report. For some reason, NC insisted that they needed both the customers’ names and the details of each purchase. In the final ruling, the judge stated: I suspect if they just looked for purchase information, they would be able to get it. And maybe they couldn’t get your book purchases, but there wouldn’t be any reason that all the shoes purchased from Zappos would be covered under the First Amendment. Unless we find it chilling that the government knows if you prefer pumps or flats. ---
**Author:** ![Chris\_Luongo](https://avatars.discourse-cdn.com/v4/letter/c/7cd45c/32.png) [@Chris\_Luongo](https://boards.straightdope.com/u/Chris_Luongo)\ **Post date:** [March 26, 2011, 9:09pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/37 "2011-03-26T21:09:21Z")
I’m a little late to this post, but I wanted to dig up cites for what I thought I remembered. The Massachusetts Department of Revenue tried to go after Town Fair Tire, a local auto-repair chain. They wanted to collect MA sales tax from tires sold and installed at Town Fair locations in sales-tax-free New Hampshire, where the customer’s car was registered in Massachusetts. [Cite 1 from Boston Globe.](http://www.boston.com/business/articles/2009/08/26/state_cant_collect_tax_on_sales_in_nh/)[Cite 2 from Tax Professor’s Blog.](http://taxprof.typepad.com/taxprof_blog/2009/08/court-mass-cannot-.html) Thankfully, the Massachusetts Supreme Court ruled in the people’s favor. Recently, Massachusetts raised the sales tax by 25%, with no improvement in services provided to its citizens. New Hampshire’s large border cities of Salem, Nashua, and Seabrook are full of retail stores openly advertising that they’re located in “Tax Free New Hampshire.” ---
**Author:** ![BrotherCadfael](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@BrotherCadfael](https://boards.straightdope.com/u/BrotherCadfael)\ **Post date:** [March 26, 2011, 9:34pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/38 "2011-03-26T21:34:21Z")
And the Mass tax authorities have people in New Hampshire shopping malls taking down license plate numbers. ---
**Author:** ![ZenBeam](https://avatars.discourse-cdn.com/v4/letter/z/3ab097/32.png) [@ZenBeam](https://boards.straightdope.com/u/ZenBeam)\ **Post date:** [March 26, 2011, 10:16pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/39 "2011-03-26T22:16:03Z")
> [@Dangerosa](#): > > I suspect if they just looked for purchase information, they would be able to get it. And maybe they couldn’t get your book purchases, but there wouldn’t be any reason that all the shoes purchased from Zappos would be covered under the First Amendment. Unless we find it chilling that the government knows if you prefer pumps or flats. They’d have to get enough information to know that what was purchased was taxable. I don’t know about NC, but where I live food is not taxable. It might not even be enough to just list the purchases as “taxable” and “not taxable”. Someone could argue that NC would have to show what the item is, to make the claim that it’s taxable. ETA: > [@BrotherCadfael](#): > > And the Mass tax authorities have people in New Hampshire shopping malls taking down license plate numbers. Sounds like an urban legend to me. What are they going to do with that information? They can’t prove any purchase was made, or the amount. I’ve heard of that at fireworks stores, across the border from a state where they were illegal, but the idea, AIUI, is to then pull over the car a short time later in the state where fireworks are illegal. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [March 26, 2011, 11:09pm UTC](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647/40 "2011-03-26T23:09:44Z")
> [@ZenBeam](#): > > ETA: > Sounds like an urban legend to me. What are they going to do with that information? They can’t prove any purchase was made, or the amount. I’ve heard of that at fireworks stores, across the border from a state where they were illegal, but the idea, AIUI, is to then pull over the car a short time later in the state where fireworks are illegal. When NY did it , they sent letters to the owners informing them that they owed use taxes for any items purchased in NJ on that date and brought back into NY. [Previous page](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647.md?page=1) [Next page](https://boards.straightdope.com/t/does-anyone-really-pay-sales-tax-on-online-purchases/571647.md?page=3)