When do I have to pay sales tax?

Answer 1

almost everywhere except

-internet

-certain tax free holidays

-other random places that are just weird

The previous response, while I suspect well intended, just restates many of the most common misconceptions (wrongs) about sales tax.

Sales tax is a STATE level tax (sometimes with some much more local (like city/town component). The law is virtually always written that there is a corresponding tax, called something like a USE tax imposed too. Either the sales or use tax applies but not both (one is a credit against the other).

The tax applies on taxable items sold OR first used in the jurisdiction where the law applies. It makes no difference how or where you buy it.

A vendor in these jurisdictions MUST collect the tax for items sold there and show so on the receipt. These funds are in his trust for the State and are paid over to it very shortly.

If a vendor is not legally liscenced in the jurisdiction the item is being sent to (and considered where the sale occurs), and most sellers on the internet, or by phone or by mail are NOT lisc in all but a few places, they CANNOT collect the sales tax money for the State and don't. By law, the USE tax should be submitted by the buyer.

As an example: If I buy something from ABC co by phone/internet, etc in another state for delivery by mail and they are not licensed as a sales tax collector in the state I'm in, they cannot charge tax. If I walk into their store, they will charge tax for the locale that sale is occurring in, (which acts as a credit for the tax wherever I put it to use).

Obviously, in most personal applications the use tax goes unreported, but in business, where the use of things and where the tax was paid is a big deal, the audit of this is regular and frequently incurs large assessments. Most larger Cos employee a department just to make sure this type of thing is handled properly on purchases.

Common misconception; Sales on the internet are exempt. Wrong. The law was made at the start of the popularity of the internet (and constantly re-defined) that sales of internet SERVICE would not be taxed, (as it was uncertain where they would be sourced/located). The sale of something over the internet was and is taxable as ever.

Understand that when you purchase over the internet (or by phone/mail, etc), even from a company you think you know, like Sears, you are not normally purchasing from the same actual corporation (legal entity) as the Sears on your corner. But rather one established with a very limited taxable presence, (probably only in 1 state), and that is the only place it needs (has the obligation/right) to collect sales tax. Hence, you frequently see on ads a statement something like "...plus sales tax to residents of ...".

Exactly what is taxable varies from place to place, but generally, it can be broken down to goods or services. Most all states tax just about any good (food for personal consumption (with what makes a food a "meal" like in a restaurant broken out) being a popular exclusion). Many don't tax services (as in labor - say a barber), but as the need to raise revenues by taxes has increased, even many of these have expanded to include many services.