RCU Forums - View Single Post - Horizon Hobby charges sales tax for online orders???
Old 02-05-2004, 02:45 PM
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soupersnake
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Default RE: Horizon Hobby charges sales tax for online orders???

ORIGINAL: SkyDude

The tax savings is one of the main reasons I buy online besides product availability. Luckily, there are still plenty of online RC places where I don't get taxed.
This is an oft-misunderstood topic. People think that because an online retailer doesn't charge them sales tax, then they are not obligated to ever pay any tax on those items.

ORIGINAL: depfife

In my home state, Alabama, there is a line on the state income tax for reporting any purchases from out of state merchants where sales tax was not collected. State law requires those purchases to be reported and sales tax paid.

Nearly every state (there may be some exceptions) requires that residents pay what is often referred to as a "use" tax on goods that are purchased out of state and brought into the state for use. Like it or not, every one of your online purchases (if you are the end consumer purchasing from a merchant and the purchase is one for goods) is subject to either sales tax or use tax.

If the merchant has a sufficient presence in your state then the merchant can/should collect sales tax at the time of purchase. If, however, the merchant does not have a sufficient presence in your home state, they are prohibited from charging sales tax to you and you are personally responsible for reporting and paying the applicable use tax for your state when tax time rolls around.

Many people are unknowingly in violation of the law in this area. Check your state law to see how and whether it applies in your state. A simple search for "use tax" and your state will tell you all about it. Then ask yourself, now that you know about it, are you going to comply? That was the question that my tax professor put to us after we covered that particular bit of tax law.