Websites are suppose to collect sales tax in states where they have a physical presence in. For example, if Apple has an Apple store in your state, you will pay sales tax if you buy something from the Apple website. If your state doesn’t have an Apple store (or a warehouse or office), you don’t have to pay sales tax.
Things have gotten interesting with Amazon and the State of New York. Amazon claims they have no official New York presence, and therefore don’t need to charge sales tax for New York. New York claims that their network of third party dealers are an Amazon presence, and thus Amazon needs to collect sales tax for New York sales.
Amazon claims that the third party dealers are independent agents and therefore, Amazon itself doesn’t have a New York presence. Both Amazon and the State agree that if you buy something from a third party vendor who has a presence in New York state, sales tax needs to be collected, and Amazon will charge sales tax. What Amazon doesn’t want to to is charge a sales tax when someone buys a book directly from Amazon itself.
Despite whether or not you are charged a sales tax, you are always suppose to pay use tax on products you buy out of state. Use tax is the sales tax rate in your state minus the sales tax you may have paid.
Most of the time, states don’t bother collecting use tax on small purchases. However, New York’s sales tax rate is 8% and they charge sales tax on clothing. In New Jersey Enterprise Zones, the sales tax is only 3 1/2% and New Jersey doesn’t charge sales tax on clothing. The Garden State Mall and Ikea are in one of these zones, and New York has threatened to start taking the license plate numbers of cars with New York license plates in order to collect the use tax. So far, that hasn’t happened yet.