robert e wrote:
Andrew Pohlman wrote:My son and I used to operate a mail order business in the 90's. The rule back then was "point of sale", meaning that you only pay tax at the point of sale. So if you ordered from Michigan, you paid applicable sale tax for that state.
That's my understanding of sales tax. Meanwhile, "use tax" is charged by states for items bought out of state (to make up for loss of revenue vs that item being bought locally, and to encourage local commerce).
So--and please correct me if I'm wrong--riffmeister paid MI sales tax (not use tax), and still owes PA use tax?
"For example, a resident of Massachusetts, with a 6.25% "sales and use tax" on certain goods and services, purchases non-exempt goods or services in New Hampshire for use, storage or other consumption in Massachusetts. Under New Hampshire law, the New Hampshire vendor collects no sales taxes on the goods, but the Massachusetts purchaser/user must still pay 6.25% of the sales price directly to the Department of Revenue in Massachusetts as a use tax. If the same goods are purchased in a US state that does collect sales tax for such goods at time of purchase, whatever taxes were paid by the purchaser to that state can be deducted (as a tax credit) from the 6.25% owed for subsequent use, storage or consumption in Massachusetts. With few exceptions, no state's vendors will charge the native state's sales tax on goods shipped out of state, meaning all goods ordered from out-of-state are essentially free of sales tax. The purchaser is therefore required to declare and pay the use tax to his home state on these ordered goods."
So it looks like I can deduct the MI sales tax I paid to SBM from the PA sales/use tax........6% - 6% = 0%........I like that number!