All Things Gardening forum: Sales tax on mail-order purchases

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Name: Zuzu
Northern California (Zone 9a)
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zuzu
Feb 26, 2013 2:42 PM CST

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A friend who owns a local nursery says her mail-order business is hurting because of the new sales tax and use tax laws. She recently lost a big sale to a customer in Minnesota because she was charging sales tax on the purchase. The customer insisted that she could buy the same items from a Texas nursery without paying any tax. Is this true? Do we really have that sort of national patchwork quilt when it comes to sales tax? Will this affect your mail-order purchases? Will you be judging mail-order nurseries on the basis of the taxes they charge?
Name: Ken Ramsey
Starkville, MS (Zone 8a)
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drdawg
Feb 26, 2013 3:16 PM CST
Unfortunately, every state and even many localities have their own tax-system when it comes to website orders. I have occasionally ordered something, then when checking out see that there was sales tax added in. Most of these companies never tell you up front, you just have to watch for it. Here in Mississippi, and I am sure in many other states, when a company has a presence in the state, say a J. C. Penny's, and you order something from their website, you will pay the 7% MS sales tax. If I can order a product from two sources, and one of those sources charges a sales tax but not the other one, you better believe I will opt to order from the one that saves me money. I pay enough taxes as it is.
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Name: Zuzu
Northern California (Zone 9a)
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zuzu
Feb 26, 2013 3:49 PM CST

Plants Admin

Thanks for the input. I'm sure it will affect my buying habits too if I run into this kind of choice in the future.
Name: Debra
Garland, TX (NE Dallas suburb) (Zone 8a)
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lovemyhouse
Feb 26, 2013 4:45 PM CST
As far as I know, in Texas, sales tax is charged on any web item that is sold from a business in the state, and which is subsequently delivered to a Texas address. Tax is charged on the item and the delivery costs.
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Name: Zuzu
Northern California (Zone 9a)
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zuzu
Feb 26, 2013 6:02 PM CST

Plants Admin

Thanks, Debra. I do most of my online shopping at Amazon and other companies with a physical presence in California, so I'm accustomed to paying sales tax on my online purchases, but I've never been charged tax on the shipping or any other services -- just on the merchandise.

Unless the laws have changed, I suspect that my friend was not supposed to charge a Minnesota customer sales tax. I wonder if the laws have changed here. California is hurting for revenue, so it wouldn't be surprising.
[Last edited by zuzu - Feb 26, 2013 8:26 PM (+)]
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Name: Jay
Nederland, Texas (Zone 9a)
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Horntoad
Feb 26, 2013 6:46 PM CST
Texas does not charge sale tax on products purchase from and shipped to addresses outside the state.
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Name: woofie
NE WA (Zone 5a)
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woofie
Feb 27, 2013 9:44 PM CST
My understanding is that if an online vendor has a physical presence in the state to which an item is being shipped, they are required to collect the sales tax for that state. I know that I pay WA sales tax when I order from Amazon, but many other vendors don't charge it, and I do pay attention, especially on larger dollar purchases. I always compare the TOTAL cost, cost of the item(s) plus shipping and sales tax to see which is the best deal. But then there are times when quality and customer service trump minor differences in total cost. Amazon is a VERY reliable place to buy. Usually. Smiling
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Name: Chris
Ripon, Wisconsin
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goldfinch4
Mar 1, 2013 3:25 AM CST
I too compare the total cost of an order when purchasing on line, so yes, it definitely affects who I purchase from on line. I know there has been talk of making all on line businesses charge tax to even the playing field (so to speak), but as far as I know that hasn't happened yet.
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Name: Betty
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daylilydreams
Mar 1, 2013 9:36 AM CST
My understanding is that a mail order or online seller can only collect sale taxes if the buyer resides in the sellers state. I have purchased items by mail order and it is stated right on the order blank that if the buyer is a resident of the sellers state they must pay that states sales tax if not no sales tax is charged.

I live in Minnesota and when I placed a daylily order from a hybridizer here in my state I did have to pay our state sales tax. Those that do not live here are not charged our states sales tax unless they happen to visiting MN making a purchase while they are here then they would also pay the sales tax.

Personally IMHO if they change the law so all online purchases are charged state sales tax, the tax should then go to the buyers sate which would seem to me to be a lot of extra work for the seller.
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[Last edited by daylilydreams - Mar 1, 2013 9:41 AM (+)]
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Name: Jacquie (JB) Berger
Wrightstown, New Jersey (Zone 6b)

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JB
Mar 1, 2013 2:52 PM CST
May i add to the confusion please. Confused

I am a certified nursery in the State of New Jersey and ship plants all over the USA. I am only required to charge NJ 7% sales tax on people residing in the State of New Jersey.

Internet and shipping sales are different than regular sales, for example, We also have a Christmas Tree business and we charge the sales tax on the Trees purchased here at the farm. (even if the people take the trees into PA or NYC) unless the people/business is tax exempt. If they were to purchase them on the internet and ship them, they would not pay tax. Have I really confused you now?

I thought that was usually the way State Sales Tax was charged everywhere. I seldom pay sales tax on purchases out of NJ but then if I buy wholesale in or outside of NJ I am tax exempt. Anyone in business can file for tax exempt status if the product is used in their business in NJ.

As far as Use Tax goes, I am not required to charge that. I in turn pay the State the amount of sales tax collected or more if I did not charge on a sale requiring it, every quarter. Some larger places pay monthly.
I hope this helps answer your questions. Big Grin
Name: woofie
NE WA (Zone 5a)
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woofie
Mar 1, 2013 3:29 PM CST
Hi JB! Now to add even more to the confusion, didn't you tell me that you can't ship POTTED plants outside of New Jersey? Not that that has anything to do with sales tax.... Smiling
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Name: Jacquie (JB) Berger
Wrightstown, New Jersey (Zone 6b)

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JB
Mar 1, 2013 3:39 PM CST
No, I can not ship plants in soil West of the Mississippi. Anything East of the Mississippi can go in pots and soil but West has to be bare root in order to eliminate any mail inspectors opening them, and then the plants usually never get delivered to their destination once they are opened. There are a few states have very rigid rules regarding soil coming into their States from some other states. I never got into finding out which they are, I just do as I am told by the State of NJ.

I do not know how the people who ship in soil manage to get past the inspectors. My post office even stopped me the other day sending seeds without telling them what they were. I had to pay extra to send them first class because they can not go through the machines. Glad I don't do that often.

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