False/Fraudulent Advertising?

[TreeScientist]

Did anyone else just see this e-mail from the James Allen listserv? As far as I am aware, unless you live in a state without sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon) you're currently responsible for claiming online purchases for the state that you reside in on your year-end personal income tax if you are a U.S. resident. Now, whether or not you claim the tax is up to the individual. But saying "As of September 1, 2018, orders shipped to certain states will be subject to sales tax" is false advertising. The orders were already subject to sales tax, you are just responsible for declaring it yourself as a resident of a state with sales tax.

I personally think that running a "Quick, you can still commit tax evasion for another 5 days!" advertisement is a little sleazy. But maybe that's just me...

 

[the_mother_thing]

Yea ... not brilliant IMO.

 

[diamondseeker2006]

I am sure what they mean is that they do not have to collect sales tax for out of state customers until a certain date. But I am not clear that even that is true, because my understanding is that each state has to pass a law requiring out of state internet and other vendors to collect their state tax. That won't occur for every state on Sept. 1.

 

[flyingpig]

TreeScientist. I completely see your point.
However, this is no different than duty-free shops calling themselves "duty-free".
Depending on shopper's destination and travel duration, she/he may need to pay the local duty and sales tax eventually. At least, at the shop, there is no duty calculated when the transaction happens. It is traveller's responsibility to check how sales tax and duty work in his/her destination country.

JA may have the same argument. Currently, JA does not collect sales tax. It is shopper's responsibility to check how tax and duty work in his/her state.

I see people having issues with this. But I would not call it fraud.
Actually, it is smart (yet controversial) marketing.

 

[TreeScientist]

TreeScientist. I completely see your point.
However, this is no different than duty-free shops calling themselves "duty-free".
Depending on shopper's destination and travel duration, she/he may need to pay the local duty and sales tax eventually. At least, at the shop, there is no duty calculated when the transaction happens.

JA may have the same argument. Currently, JA does not collect sales tax.

I see people having issues with this. But I would not call it fraud.
Actually, it is smart (yet controversial) marketing.

But duty-free shops are actually duty free, up to a certain limit of course. For example, in Norway, we can legally bring in 1 liter of spirits, 3 liters of wine (4 bottles) and 2 liters of beer without duties (don't ask me why I have that memorized ). And each duty-free purchase states right on the receipt that your purchases may be subject to taxes in your destination country depending on the country's quotas.

At the very least, I was expecting an asterisk and then some fine print saying something along the lines of "Customers are responsible for adhering to the statutes governing tax collection of the state in which they reside and of the state in which they take delivery." (this is taken from the WhiteFlash website in the FAQs regarding sales tax). But no, no asterisk or fine print anywhere in the e-mail. Just them going on about "tax-free savings".

So it's definitely not smart marketing, particularly due to the lack of any fine print clarifying what they mean by tax-free. Also, and this is an issue of semantics, but they should not say that "orders will be subject to sales tax" because, as I said, they already are subject to sales tax in many cases. They should say something along the lines of "As of September 1, 2018, we will be required to collect sales tax on orders shipped to certain states."

 

[ccuheartnurse]

I wasn't aware of this change. Is this across the board with other vendors too? Sorry to thread jack but I too am not American & if there was a change to this tax thing, I wasn't aware of it.

 

[TreeScientist]

I wasn't aware of this change. Is this across the board with other vendors too? Sorry to thread jack but I too am not American & if there was a change to this tax thing, I wasn't aware of it.

Yep, this is across the board. It's a new federal law that allows states to require vendors to collect tax on cross-border transactions. But as @diamondseeker2006 said, it's up to the states to pass a law requiring the vendors to do so, so this isn't going into effect for every state on Sept. 1st. This is the list of the states that will be requiring vendors to collect sales tax on cross-border transactions:

Colorado, Connecticut, Hawaii, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Washington, and Wyoming

 

[MollyMalone]

Yep, this is across the board. It's a new federal law that allows states to require vendors to collect tax on cross-border transactions. But as @diamondseeker2006 said, it's up to the states to pass a law requiring the vendors to do so, so this isn't going into effect for every state on Sept. 1st. This is the list of the states that will be requiring vendors to collect sales tax on cross-border transactions:

Colorado, Connecticut, Hawaii, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Washington, and Wyoming

I wasn't aware of this change. Is this across the board with other vendors too? Sorry to thread jack but I too am not American & if there was a change to this tax thing, I wasn't aware of it.

Not limited to just diamond-jewelry sellers. But not every seller in the list posted by TreeScientist is required to collect sales tax on purchases made by out-of-state customers. In order to minimize constitutional challenges,** each of the new state statutes, and similar ones previously enacted, have set a threshold. Online sellers who don't meet that threshold -- e.g., low-level eBay sellers -- are not expected to collect-remit the 'net sales taxes.

This list hasn't been updated since it was posted in late July, but it gives you an idea of the kinds of qualifiers that states have chosen for this particular purpose:
https://warrenaverett.com/insights/state-nexus-standards-internet-sales-tax/

** It was a July 2018 U.S. Supreme Court case that overruled its old, prior holdings that a state cannot require a retail seller to collect-remit sales taxes if the seller does not have a physical presence in the state. But the Court did not jettison the requirement that there be a "substantial" economic nexus between the taxing state and a seller -- although it did not provide a "black and white," blanket definition of the necessary nexus.

 

[msop04]

This is the list of the states that will be requiring vendors to collect sales tax on cross-border transactions:

Colorado, Connecticut, Hawaii, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Washington, and Wyoming

Hell YES!! Alabama finally did something right! LOL

 

[flyingpig]

There are alot of things I admire about America. US tax code and laws aren't one of them.

 

[MollyMalone]

Hell YES!! Alabama finally did something right! LOL

I reeeeally don't like being the bearer of bad tidings, but if you take a look at the list I linked, you'll see that Alabama enacted this kind of legislation 3 years ago, although your state postponed its enforcement date to October 1, 2018.

 

[msop04]

I reeeeally don't like being the bearer of bad tidings, but if you take a look at the list I linked, you'll see that Alabama enacted this kind of legislation 3 years ago, although your state postponed its enforcement date to October 1, 2018.

Well, hell... glad I've already done my "big" upgrade. LOL I didn't buy my stone online, but the vendor did ship it across the state line for me so that I didn't have to pay sales tax. That would probably be frowned upon, but I was glad to have a "discount."