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Ecommerce Forum

State Tax from Billing or Shipping Address
which address do I use?

 1:21 pm on Mar 25, 2008 (gmt 0)

I'm setting up CA State tax on all three of our websites and from what I can see on other forums the State tax is based on where the item is shipped to and not where the purchaser's home/billing address is.
So if a customer buys an item in California (where our business address is) but has it shipped to Fiji then State tax does not apply.

Does this sound correct?



 3:30 pm on Mar 25, 2008 (gmt 0)

State sales taxes are always a can of worms, but I would go by shipping address.

(Of course, this isn't logical in the offline world. If someone from Fiji walks into a B&M business in California, he's still going to be charged state sales tax.)


 2:14 pm on Mar 26, 2008 (gmt 0)

I've always based it on the billing address. You can't walk into a jcpennys and avoid tax on something you mail to another state.


 11:20 pm on Mar 26, 2008 (gmt 0)

I've always based it on the billing address.

Then in most states you would be doing it wrong. It's usually based upon the shipping address. Just check with your state's sales tax office. Most of them would have a website.


 2:45 pm on Mar 28, 2008 (gmt 0)

"You can't walk into a jcpennys and avoid tax on something you mail to another state"

Actually, yes you can. If the store ships the item for you. I recented purchased a $300 item in Las Vegas while on vacation. The store shipped the item to my home in Pennsylvania and therefore did not charge me sales tax, even though I was standing right there in the store.

A simple call to your states Sales Tax office would be the best place to get advise on this though...

Although I should also point out that the reciever may need to pay USE TAX on the item when they recieve it. As I needed to do, so I didn't actually avoid the tax, I just paid PA's lower rate.

[edited by: Dogza at 2:50 pm (utc) on Mar. 28, 2008]

Corey Bryant

 9:18 pm on Mar 29, 2008 (gmt 0)

Ask your CPA, but most websites will charge tax where the item will be used. You can get the tax rates from a few of the electronic payment gateways even (since they can even vary city / county) if you get into that.

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