Re:California wants to end Cupertino's tax deal with Apple
by tzs on Monday November 06, 2023 @12:11PM
(#38165341)
Technically correct, but in practice if you bought something online from out of state it was subject to your state's use tax, which had the same rate as your state's sales tax.
But your state could not make the seller collect the use tax for the state so instead consumers were required to report those purchases to their state and pay the tax.
Almost no consumer did that, except for items that had to be registered like cars where the state would not allow registration if the use tax was not paid, and so the use tax was widely openly evaded.
For online purchases where the buyer and seller were in the same state the state did have the power to make the seller collect sales tax and I believe most states did.
It was pretty common though for the tax to be the sales tax at the seller's location, not the buyer's location. And not just in the US--prior to 2015 a seller in an EU country selling online to a buyer in another EU country collected their own country's VAT not the buyer's country's VAT.
A few years ago the Supreme Court in the US decided that states could make online sellers in other states collect for them. I believe it is technically use tax that is collected in this case, not sales tax, but since the rates are the same and most consumers weren't even aware of use taxes, so everybody just calls it sales tax.
But your state could not make the seller collect the use tax for the state so instead consumers were required to report those purchases to their state and pay the tax.
Almost no consumer did that, except for items that had to be registered like cars where the state would not allow registration if the use tax was not paid, and so the use tax was widely openly evaded.
For online purchases where the buyer and seller were in the same state the state did have the power to make the seller collect sales tax and I believe most states did.
It was pretty common though for the tax to be the sales tax at the seller's location, not the buyer's location. And not just in the US--prior to 2015 a seller in an EU country selling online to a buyer in another EU country collected their own country's VAT not the buyer's country's VAT.
A few years ago the Supreme Court in the US decided that states could make online sellers in other states collect for them. I believe it is technically use tax that is collected in this case, not sales tax, but since the rates are the same and most consumers weren't even aware of use taxes, so everybody just calls it sales tax.