ergophobe - 8:26 pm on Mar 9, 2010 (gmt 0)
The problem is unless the buyer and seller are in the same state it really shouldn't be a state sales tax.
What does "should" have to do with anything related to tax policy? According to current law, only the primary residence of the buyer matters. To the best of my knowledge, in every state in the US with sales tax, official law is that if I drive to another state, load up my car with a flat screen TV or a truckload of laundry detergent, I need to pay sales tax on that. Same with items I mail order.
This is why various criminals engage in cigarette smuggling within the US from states that have low sales tax on cigarettes to states with low sales tax.
The only item that is consistently caught by this is out-of-state auto purchases, because they hit you for sales tax upon registration.
Now as soon as we have to register our TVs and laundry detergent before we can use them, we'll have this whole problem licked.
In theory, items purchased via mail order are NOT exempt from state sales tax. Merchants are exempt from charging sales tax, but the customer is still legally obliged to pay it.
It is a travesty that mail-order, be it online or catalog sales, are exempt from sales tax altogether, thus undercutting local businesses.
It's also a travesty to apply the taxes is this idiotic way, as buckworks says.
One problem is that there are hundred, if not thousands, of sales tax districts in the US and they have all kinds of arcane rules - in some places food is included, in most places it isn't. In Minnesota, last I knew, clothes were exempt.
Meanwhile, when you go from county to county, the taxes change. In my county, we have to track *two* county taxes for a vacation rental.
We need federal legislation on this to put all states on an equal footing and start charging the same state sales tax for mail order.