Is there sales tax online for clothing?
I am ordering a suit, two ties, and a dress shirt from Express.com. When I went to check out it said there was an estimated sales tax of $12.84. I was surprised one because I didnt know there was sales tax at all when you purchase items online and two because when you buy clothing I thought there was only a luxury tax. Like if I bought something for $500 or something.
I am just wondering before I purchase the clothes should I call customer service or would I just be wasting time calling because there is definitely a tax? I live in Massachusetts if that makes a difference. Thanks!
- TaxManLv 59 years agoFavorite Answer
Great question, by the way...and one that will be increasingly relevant as states scramble for income.
Your question is really a two part question.
The first is, does MY state tax the item I'm purchasing? Check on-line to see if your state taxes things such as suits, ties, etc. Some states don't tax any clothing. Some tax accessories like ties and belts, but not shirts and pants.
If your state does not tax these items, then whoever is selling the item to you and delivering it to your address within your state shall not collect sales tax...regardless of anything else you hear. They have no right to collect a tax from you that you are not legally obligated to pay. Some retailers screw this up, so be sure to straighten them out.
If your state does tax the item, then regardless if the on-line retailer collects the sales tax from you or not, you are still obligated to pay it. Basically, if the retailer has what is known as "nexus" in your state, they are obligated to collect and remit the sales tax to your state's tax collection agency. If they do not have "nexus", then per the Commerce Clause in the US Constitution, they are not obligated to act as an agent on behalf of your state and are not obligated to collect and remit sales tax.
Either way, you are under no obligation to pay sales tax in the state where the seller is located unless you enter that state and make the purchase...or you have the item shipped to an address in that state.
When you buy an item that your state does tax, whether it is on-line or you drive to another state to buy it then bring it back into your state, you must pay tax on it one way or another. If the retailer does not collect the sales tax from you, or they don't collect enough sales tax, the difference must be remitted by you to your state. When you do this, the tax is called "Use Tax". Your state is always eager to collect Use Tax. Simply search on-line and you'll see how to do this.
Just for completeness, if you purchase an item in another state and bring it back to your state and your state taxes that item, and you paid sales tax to the state where you bought it, then you only need to remit Use Tax on the difference in tax and only if your states sales tax rate is higher. If your state taxes at 5% and you bought an item for $100, then you will owe $5 minus what the other state charged. If the other state charged $5 or more, you neither owe nor will get back the excess.
Bottom line, if your state taxes an item you buy on-line, but the on-line retailer does not collect sales tax, you are still obligated to pay the sales tax (now called Use Tax) to your state.
Since the vast majority of people don't know about this...and the ones that do hardly every pay the Use Tax...and the difficulty and time required by the state to go after all the scofflaws...the states have turned their guns on the Nexus issue. They are trying to make a case that more and more on-line retailers have Nexus in their state to force them to collect the sales tax. This has resulted in may interesting court cases and will continue to be a fascinating battle as it unfolds.
- Bostonian In MOLv 79 years ago
If they have a nexus in MA they must collect MA sales tax on all taxable goods.
MA used to exempt clothing with a single item price of less than $275 from taxation. Anything priced at $275 or more is subject to tax on the full amount of the sale price. I don't know if the $275 exemption amount still stands but $12.84 would indicate a selling price well below that based upon the MA sales tax rate.
- Anonymous5 years ago
on line store; no tax ID needed--unless needed by a supplier. Best to tell no one also. the reason is long-but the abbreviated reason is; why do cities license businesses; to collect taxes to pay for fire and police, etc. YOUR on line biz uses neither. selling is selling, shipping depends on from where to where. ups works well. do you have a written biz plan? if not, start writing one tonight. [little hint for all on line biz';s volunteer nothing to any municipality till you have to!] I can guide you, on a limited basis free
- 9 years ago
Depends where you shop online. You can find places like Wal mart that ship from site to store to save on shipping costs but like I said tax is based on where your ordering and what state you live in.
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- troLv 79 years ago
if the online store has a nexus in your state, yes, they will charge you sales tax