Maybe this has been happening all along, but I just noticed it: today I ordered something connecting with light fixtures at the lighting store (I would have ordered online but I couldn’t find the model number). The charges were:
$16.00 for the object
$8.00 shipping (:eek: I know!)
$2.16 sales tax at 9.0%
So clearly they charged sales tax on the shipping charge (to the store, even, not to me).
Is this acceptable? Are they going to have to pay the whole $2.16 to the various government agencies (state and county, I think), or are they going to pocket the extra $0.72?
I used to know this stuff better, but if I remember right, you can charge as much sales tax as you want in California as long as you pay everything collected under that name to the Board of Equalization. The rate (9% for you it seems) is just the minimum you are required to collect.
For shipping charges, they don’t have to charge tax unless they are charging more than the actual cost of shipping, which, unless you ordered $16 of bricks, they probably are.
For CA, it depends. Most shipping charges are not taxable. It is not uncommon however to see $XXX.XX and free shipping. Effictively you have paid sales tax on shipping as the shipping charges are integrated into the taxable price of the item.
This just happened to me and I live in Pennsylvania. From an Amazon seller I bought a book for a penny and paid $3.99 shipping and was charged zero tax. Amazon always charges the appropriate tax when I buy an item but I never noticed if they charge tax on shipping before. From another store I bought some clothes and they had a $0.99 special mailing rate for all items. Since PA has no tax on clothes they charged me only $0.07 tax on the shipping. I have no idea who is right.