Sales taxes; Use taxes

I had a very interesting conversation with my tax preparer last night.

Many of us, myself included, purchase cameras and other photographic equipment online. In many cases we are not charged the sales taxes for our respective states by the online retailers we buy from. In California, a person who purchases an item in another state for use in California is required to pay "use tax" on that item to the state. It is assessed at the same rate as the sales tax. I'm sure most other states that have sales taxes require this as well.

Up until now this has been largely ignored by the states, but in light of the current economy, that is going to change. My tax person mentioned that one of her clients had received a letter from the state stating they had purchased an item out of state and the tax was due on it. The other client had no idea what item the letter was taking about. The states are now beginning to pursue the collection of sales taxes on items purchased online.

In California, the "use tax" can be paid at the time the state income tax is filed. This is what I started doing last year for all the purchases I make online. I would recommend that everyone who shops online consult with their tax person to determine if these taxes are required.

I'm paying sales tax on all of my gear. Maybe it's a californian thing.

JWright,
It has to be done for the last few years in my state also NY

Yes, technically if you aren't paying state sales tax to your state, you're breaking the law. Most states don't enforce it though.

And those who have California resale permits have long been expected to pay the use tax on out-of-state purchases at the time of their filing and submitting collected sales taxes from your customers.

imahawki wrote in post #7719558
Yes, technically if you aren't paying state sales tax to your state, you're breaking the law. Most states don't enforce it though.

The thing most people don't realize is that this applies to ANYONE who purchases out-of-state, not just people who have businesses.

Wilt wrote in post #7720540
And those who have California resale permits have long been expected to pay the use tax on out-of-state purchases at the time of their filing and submitting collected sales taxes from your customers.

Been there, done that... My ex-wife was a wildlife artist and she had a resale permit. We had to do that once a quarter.