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A commenter on my free shipping listing suggested a post on sales tax info and I was happy to oblige. In general, if a store exists in what’s known as “brick and mortar” form (i.e. it has a physical location or locations), you’ll probably have sales tax added to your order. This applies to basically any store you might happen upon in an American shopping mall or shopping plaza: Gap, Victoria’s Secret, Famous Footwear, Barnes and Noble, Macy’s, etc.
But what about internet-only retailers? Read on to get the scoop on that… The web has long been somewhat of the “wild, wild west” of shopping precisely because it helps many consumers avoid paying an extra 4-8+ percent on whatever they’re buying. This is a bit of a misperception because even if your purchase isn’t subject to your state’s sales tax, it most likely is liable to be reported and charged a “use tax.” (Show of hands for anyone who declares their out-of-state/online purchases on their state tax return and pays the associated use tax? Yeah, that’s what I thought…)
Also, you probably won’t find an internet-only retailer that doesn’t charge sales tax to residents of at least one state. The reason for this is known as “nexus.” Basically any entity having a physical presence in a state is subject to the laws of that state including the charging and collection of state sales taxes. So while you can stroll into a local brick and mortar Amazon.com store and browse the books and CDs, their administrative headquarters, warehouses and distribution centers all have physical locations–and these entities create “nexus.”
Faced with a growing loss of revenue, many states have started to fight the internet-only retailers with so-called Amazon laws whereby the nexus of a business would be expanded to include affiliates in addition to the administrative offices, distribution centers, etc. In addition, an Internet Sales Tax legislation proposal is due to be presented to the US Senate next month which would require retailers to collect sales tax wherever applicable–not just the states in which they have physical presences.
In the meantime, here’s a round-up of popular online-only retailers and their sales tax policies:
1-800-Contacts: Appears to collect sales tax only from UT residents
1-800-Flowers: Collects sales tax from residents of AZ, CA, CO, FL, IL, NV, NM, NY, OH, OK, TX and VA
6pm.com: Collects sales tax from residents of KY, NV, NY and NC
Alice.com: “Alice.com is a marketplace that enables you to buy direct from multiple manufacturers without a retail middleman. Because of this direct relationship, we need to collect and remit sales tax in all jurisdictions.”
Alloy: Charges sales tax to orders shipped to CO, NY, OH and PA
Amazon: Currently charges sales tax on orders shipped to KS, KY, ND, NY or WA
AmericaRx: Sales tax charged for NY residents.
Art.com: CA, MA, NC, NY and OH (no tax on gift card purchases)
Athleta: Although Athleta has only two stores in California, apparently their affiliation with Gap brands means all US orders are assessed sales tax where applicable.
Backcountry.com: Only orders shipped to a UT address are charged sales tax, but residents of CO and OK are notified of their obligation to pay use tax on purchases.
Blue Nile: WA residents charged sales tax
Bluefly: CO, NY and OH
Build.com: CA and Canada
Buy.com: CA and MA plus “...and any other states or localities that it deems is required.”
BuyDig.com: NJ only
Cooking.com: CA and OH plus they “[w]ithhold sales taxes for partner sites based on location…”
CSN Stores: MA and UT plus they notify CO residents of responsibility to file use tax.
Dog.com (also applies to Horse.com, Bird.com, Ferret.com and Garden.com): Not only are orders shipped to MO, NY, PA and SC charged sales tax, but those charges are calculated on top of shipping charges.
eBags.com: Orders shipped to CO and TN are assessed sales tax
eCost.com: Buyers shipping to addresses in CA, TN, TX will pay sales tax
eDressMe.com: Only NY orders are charged sales tax
Endless.com: Sales tax charged on orders shipped to KY, KS, ND, NY or WA. “Endless.com will begin collecting sales tax on items shipped to destinations within the State of New York as New York has enacted a new law requiring out-of-state sellers to collect and remit sales tax based on advertising. A lawsuit has been filed challenging the constitutionality of this provision.”
Etronics: NY is only state where sales tax will be charged
fabric.com: Orders shipped to GA and WA will be charged sales tax
Folica.com: NJ and NY orders are charged sales tax
FragranceX: Charges sales tax only for orders shipped to NY
FTD: AR, CA, CT, FL, GA, IL, ND, NJ, NY, TX plus “[r]eimbursement of GST costs will apply to Canadian orders.”
Getzs.com: Orders shipped to a MI address are charged sales tax
ICE.com: Sales tax assessed on Canadian orders only
NewEgg: CA, NJ, TN
OnlineShoes: OH, VA and WA plus notification of obligation to report/pay use tax for CO residents
PC Connection: AL, IL, NC, NJ, NY, OH
Piperlime: As with Athleta, due to being one of the Gap brands all purchases are taxed.
Proflowers: AZ, CA, CO, FL, GA, IL, IN, KS, MA, MI, MS, NC, NJ, NY, OH, PA, RI, TN, TX, VA and WA are all charged sales tax. (Whew–it might have been easier to list the states that aren’t charged!)
Red Envelope: CA, CO, IL, NY, OH, PA and VT
Shoes.com: IL, MO, NY (some exclusions apply) and WI
ShopBop.com: NY, WA, WI and perhaps others. CO shipment recipients receive notification of use tax reporting obligation.
Shutterfly: Tax on all orders except for those shipped to AK, DE, MT, NH, OR and VT
SmartBargains.com: CO, KY, MA, NC, NY and WA
Spiegel: NY and VA
Teleflora: Not only are orders delivered to AR, MI and OK subject to sales tax, but orders placed from those states are as well.
Threadless.com: CO and IL
Vistaprint: NC and NY
Vitacost: FL (on personal care products, aromatherapy, pet products, appliances and books), NC (on top of shipping) and NV
YOOX.com: CO, NC, NJ, NY
Zappos: KY, NC, NJ, NY
Zazzle.com: CA, NY
As far as sales tax for internet-only retailers goes, residents of New York are hit hardest with 38% of the retailers listed above having nexus in that state. California residents are a distant second with 23% of the retailers imposing sales tax on orders shipped to that state. New Jersey, North Carolina and Colorado residents are charged sales tax by approximately 17% of the internet-only retailers listed above.
Does whether or not an online retailer charges sales tax affect your purchasing decision? Let us know in the comments.