If you want to buy directly from wineries that are out of state and have them legally ship the wine you have to pay your state’s sales tax. That’s the way it works in Ohio and I assume it’s the
same everywhere else.
For some months, I have been asked by some wineries to pay sales tax. They are inconsistent as to whether they charge me CA or TX sales taxes. JJB is now charging Texas sales tax on all of my orders. That is a relatively new occurrence.
I wouldn’t pay it. If they misbilled you that’s on them. If it was something egregious maybe I’d have a different view but I wouldn’t budge on this one unless there was a very compelling reason.
i do have to symphatize with the winery on this one. The old regime let interstate sales happen and no one ever collected sales tax. After the Supreme Court ruling in Wayfair, that all changed, so now everyone has to pay sales tax. And the winery is just trying to comply with sales tax rules that have upended the old regime. All your other online retailers that don’t charge you sales tax will probably start doing so very shortly for the same reason. Seems a bit unfair to stuff the winery on this when in reallity you should have paid it. Kind of like keeping that extra $10 bill when the cashier makes a mistake… Just my $0.02
The Minnesota requirement for out of state entities to collect and remit sales tax for goods shipped into Minnesota is quite recent. I believe they passed a law that could only be enforced if the Wayfair case was decided in favor of states, and I think it goes into effect for goods shipped after October 1. They didn’t mis-bill. Sounds like these must be futures. If it were me, I’d either tell the winery I no longer want the wine (actually, I wouldn’t), or I’d pay it. But, I would not expect them to eat it. Of course, I’ve been paying use tax on my similar shipments for years, so it would be a push for me.
I believe there is a small seller exemption, don’t know whether this winery would qualify.
-Al
Many wineries pay big bucks for a person to handle compliance issues, both licensing and tax related. California has a “use tax” in place. You are supposed to keep receipts of out-of-state purchases and apply your local tax rate, paying it when filing tax returns. That’s probably what most states have and some are now taking action to collect that tax money.
States that pursue the use tax would do so directly against the consumer, not the seller.
It’s not a use tax the states are now collecting. It’s sales tax on purchases from out of state, and the seller has to collect that. It’s all because of the Wayfair Supreme Court decision last year, which reversed earlier decisions and allowed states to collect sales tax from businesses based elsewhere even if they don’t have a physical presence in the state to which they are shipping (a requirement in the past). States have to enact laws to take advantage of this, however, so the collections did not start immediately.
There’s a pretty good discussion of the impact of the decision here:
Why are retailers collecting tax for the state in which they reside?
Wineries collect for the state they are shipping to, as does every other retailer (Amazon ect)
I get that they claim the purchase is being made there, but that goes against all other commerce online. If I order from NY and pay their tax, that’s good enough for my state now? Somehow I think they will disagree.
Who’s doing that? I think some people here assumed that’s what was happening.
The Minnesota requirement for out of state entities to collect and remit sales tax for goods shipped into Minnesota is quite recent. I believe they passed a law that could only be enforced if the Wayfair case was decided in favor of states, and I think it goes into effect for goods shipped after October 1. They didn’t mis-bill. Sounds like these must be futures. If it were me, I’d either tell the winery I no longer want the wine (actually, I wouldn’t), or I’d pay it. But, I would not expect them to eat it. Of course, I’ve been paying use tax on my similar shipments for years, so it would be a push for me.
I believe there is a small seller exemption, don’t know whether this winery would qualify.
There goes most of my purchases in California unless it is something MN does not carry. Shipping costs were always under the tax amount on most purchases so now paying shipping and tax is going to make it too expensive.
generally they should be collecting for the state the purchaser is located in (which is now allowed per the Wayfair decision). But some wineries I have seen consider title to pass in California (usually) when they ship the wine - i.e., they sell it to you in California and then ship it on your behalf (kind of like if you actually purchased at the winery). I assume this is skirting the rules on having a permit to ship to a given state (or whatever requirements they need to meet), but at least they’re in tax compliance, while avoiding the costs of complying with the shipping laws of most/all other states.
Last year I had the State Dept of Revenue send me an audit letter for three years of out-of-state wine purchases. Evidently they had kept track of the many dozens of cases I had shipped in. Don’t know why, but I had operated with the understanding that internet sales were tax free. They are not. I owed a big tax check, plus penalties and interest. Was 100% my bad. Taxes were due.
How did they keep track and know what you purchased where? Did you buy as an individual?
They didn’t. They do spot audits and I guess my name popped up a lot because of wine, art and other things that I ship into the state. They sent me a self-audit letter, which if I did not honor, would result in a full audit by them at my expense. So I grabbed 3 years of VISA statements and did a manual, self-audit. Took a lot of time, but I was not going to take any chances.
Oh man. I rotate my credit cards out for the points. I guess it gives the added bonus of plausible deniability… as long as they do not find my CT account 
Seem odd they’d be tracking what people ship into the state (or perhaps disturbingly Orwellian). Seems more likely they somehow got a hold of shipping records of one of the companies/wineries you bought from and pursued you as a result.
FWIW, almost all (if not all) states with a sales tax also have a “use tax” or some other obligation to pay the state tax equivalent on out of state/tax free purchases that you have shipped. I think only a small percentage of people pay that, although I’d guess a large percentage of those who are audited.
No. I spoke with the auditor on my file. The Florida DOR has agents at the truck weighing stations on the major Florida arterial and they spot check contents. Over that three year period, I had a lot of in-state shipments, including large-scale art that is hard not to see given the odd box size. It would seem random but apparently works for them.
Most NY retailers are collecting NY tax (Zachy’s ect) and my last order with SommPicks they tacked on CA tax.
To be legal I assume we all need to still pay tax where we live. If you get audited like Robert I’m pretty sure your home state won’t care if you already paid out of state tax or not.
I think the big retailers Might be collecting state tax to stay off the radar of their enforcement, but that’s not going to be legit for the consumer when the tax man comes calling.
In general you owe the difference between the prevailing rate in your home state and any sales tax collected at the point of sale
Joe did the winery already process your credit card months ago, or is the first time? I work at a company that provides many large companies with sales/use tax research and software and would be happy to ask my head of Research about your situation