2. misc-audio
  3. 160182-121900

MusicDirect

I was wondering if someone can explain if it is appropriate for a vendor to charge buyers the sales tax rate where the vendor is located instead of the sales tax rate where the purchaser is located, for an online purchase? MusicDirect is located in Chicago where the sales tax rate is 10.25%. I live in Illinois but not in Chicago where the sales tax rate is 6.25%. MusicDirect persists on charging me 10.25% when Amazon, eBay and other vendors charge me 6.25%. They have told me that they charge me 10.25% because the have “a physical nexus to Chicago”. Well I do not. Using MusicDirect’s logic Upscale Audio should be charging me California sales tax, which they do not. Anyone care to explain to me if MusicDirect is correct in their practice and why? Thanks. 
Ag insider logo xs@2xkingbarbuda

Showing 1 response by riley804

riley804
1,224 posts
 
Sales tax

Sales tax is a pass-through tax. This means customers, not businesses, pay sales tax. However, business owners must collect, deposit, and report the sales tax.

Businesses that need to collect sales tax must do so at the point of sale. Customers purchasing products are responsible for paying the sales tax.

States can also get specific about which products have sales tax. For example, some states charge taxes on groceries while others do not.

https://www.patriotsoftware.com/blog/accounting/sales-tax-laws-by-state/

https://smallbusiness.chron.com/tax-outofstate-purchases-20811.html

https://www.avalara.com/us/en/blog/2018/11/how-to-handle-sales-tax-on-shipping-a-state-by-state-guide.html

Google is great.

you do have the option to not use them ....
More to discover