Gearslutz.com - View Single Post - California going to charge "Use" tax for online or out of state purchases.

TRA · 13th November 2009

It's happening all over. The IRS is cracking down on tax laws that have been in place for years, but haven't really been enforced.

Here are a couple of examples:

If a gear dealer in New York has an item dropshipped from XYZ microphones to their customer in Maryland the dealer in New York must have tax exemption in the state of Maryland to not be taxed.

If the dealer was in Ohio and the customer is in Colorado the dealer only needs tax emeption in one of those states to be tax exempt.

It's the responsibility of the manufacturer that dropshipped the items to collect that tax. It's different for each state/scenario. I actually have a spreadsheet that maps out the different scenarios so I know who is responsible when.

13th November 2009	#16
TRA Lives for gear Join Date: Dec 2007 Posts: 833	It's happening all over. The IRS is cracking down on tax laws that have been in place for years, but haven't really been enforced. Here are a couple of examples: If a gear dealer in New York has an item dropshipped from XYZ microphones to their customer in Maryland the dealer in New York must have tax exemption in the state of Maryland to not be taxed. If the dealer was in Ohio and the customer is in Colorado the dealer only needs tax emeption in one of those states to be tax exempt. It's the responsibility of the manufacturer that dropshipped the items to collect that tax. It's different for each state/scenario. I actually have a spreadsheet that maps out the different scenarios so I know who is responsible when. __________________ You laugh because I'm different I laugh because I just farted!