People are confusing the terms Sales Tax and Use Tax. While their intent are really the same thing, they are not the same in terms of the law. A sales tax is taxation on the sale of an item. States have jurisdiction on the tax rates for sales within their state, but interstate commerce is federal jurisdiction, so states cannot impose taxes on those transactions. The states do not want to lose this revenue if people purchase out of state, but they cannot legally tax those transactions so instead they tax the use of item, hence “Use Tax”. Reading the California documentation, if you do not plan plan to use the item within California, then the use tax does not apply. Hey, I wear the CZ in California and the diamond when I travel outside the state.
I am not an attorney, but I question the legality of this ‘technicality’. However, unless someone has the funds and skills to fight it through the LONG legal process, our government will impose these taxations. Is it ethical for a person to evade taxes using loopholes? Is it ethical for the government to resort to technicalities to apply taxes to which they have no legal basis?
What is interesting is the state where the purchase took place is the one that loses taxation revenue.
[Edited the wording, changed immoral to ethical.]
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