The "new" on-line tax has me confussed. I understand it is called
South Dakota law (SB 146) enacted in April 2011.
If you are a South Dakota Resident do you have to pay it regardless. If you're ordering something on-line and let's say you're in AZ at the time, do you have to still pay?
Just wondering. I thought I had my research done on which state we were going to reside in but maybe not. Any info would be helpful. Tried looking it up on their state web site and got even more confussed.
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The way I understand SB 146, it doesn't require the collection of sales tax from the consumer just that the retailer give the consumer notice that they may owe SD a use tax on the purchase. The use tax has been in effect in SD and most other states for quite some time but the consumers generally ignore it. SB 146 simply states that the retailer must post notice on the web site and the invoice that they may owe the use tax. This way the consumer cannot plead ignorance to the law requiring a use tax. If you are having items sent to a SD mailing address, IMHO, that would make it subject to use tax as it has always been.
I also believe that SD will have a tough time forcing retailers without a Nexus in the state to obey this law since there is really little recourse for the state if the retailer refuses.
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When we order online, they charge us sales tax only in the state we're having it delivered to. #5 looks like the same practice. They would charge us tax even as a non-resident if we had it sent to SD. The law is for companies (online auctions) that are exempt because their SD sales are so low and aren't required to collect sales tax. They must provide an electronic notice or attach it to the invoice. Than #4 applies and you fill out a sales tax form and pay directly to the state tax collector.
From SB146: (5) "South Dakota purchaser," any purchaser that purchases tangible personal property, services, or products transferred electronically to be shipped or transferred to South Dakota.
(4) The state requires each South Dakota purchaser to report any purchase that was not taxed and pay tax on the purchase. The tax may be reported and paid on the South Dakota use tax form; and...
disclaimer: I am not an attorney nor do I ever pretend to be...
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...If you are a South Dakota Resident do you have to pay it regardless. If you're ordering something on-line and let's say you're in AZ at the time, do you have to still pay?...
Generally you owe your state of residence use tax on items purchased out of state when you bring them back into your home state. All that I have investigated give credit for any amount of sales tax paid in the state of purchase.
This is from the South Dakota website: "South Dakota will grant credit for sales tax that was correctly** paid to another state up to the amount you would owe in South Dakota. If you make a purchase in another state and are charged a sales tax rate equal to your rate in South Dakota, no South Dakota use tax would be due. If you make a purchase in another state and are charged a rate that is less than your rate in South Dakota, you will owe South Dakota the difference in use tax."
So in your example, AZ has a 6.6% state sales tax plus any local sales tax. Since South Dakota's sales rate is 4% plus a max of 2% local, if you paid the AZ tax you would owe no SD use tax even if you bring the item into SD.
In Tn, unless something has changed you are expected to pay sales tax on everything you buy anywhere, if a Resident. Of course no one does. It would be impossible to track and collect. Some more expensive items are somehow supposed to be reported to the state if you buy in other states by the seller.
Won't be long before the computer networks will be put to use doing this just like the stalled or perhaps killed federal required 1099s for every dime you pay or are paid for just about everything.