Retroactive Sales Tax

[Robert_M_yers]

Who’s doing that? I think some people here assumed that’s what was happening.

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

Why would I owe tax locally on something I took ownership of (because of a disclaimer) in the other state.

The question is whether your state agrees with this disclaimer, which I doubt they would if they pressed for tax info.

You are going to owe double tax if this issue is pressed imo.

[John_Morris]

I didn’t think states had in the past tried to collect sales tax on sales leaving that state. That’s what made buying out of state so attractive, not just for wine.

[John_Morris]

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.

That strikes me as complete BS, and a formula to get in trouble with the tax authorities at both ends of the line, particularly after Wayfair. This seems particularly risky given that they have alcohol licenses that might be jeopardized. Most wineries seem to run scared on tax issues, for good reason.

[Robert_M_yers]

I didn’t think states had in the past tried to collect sales tax on sales leaving that state. That’s what made buying out of state so attractive, not just for wine.

They do now but seemingly only for wine, which for us could be a problem when each state starts staking it’s claim. I’m all for paying fair tax, but don’t see how this one will be resolved once the receiving state realizes what’s going on.

[AndrewH]

I didn’t think states had in the past tried to collect sales tax on sales leaving that state. That’s what made buying out of state so attractive, not just for wine.

They do now but seemingly only for wine, which for us could be a problem when each state starts staking it’s claim. I’m all for paying fair tax, but don’t see how this one will be resolved once the receiving state realizes what’s going on.

I think it’s well beyond wine at this point - most major retailers are now collecting the sales tax of the state to which the online order is being shipped. Prior to Wayfair states were not able to collect that tax (or at least couldn’t enforce their tax rules against out of state shippers with no in-state presence). Now they can.

So, what you should be paying is your state’s sales tax on any shipments, wine or otherwise, to you.

[AndrewH]

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.

Wow - I think if you’re on the DOR list from spot checks at weigh stations you should win the excessibe baller prize.

[Robert.A.Jr]

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.

Wow - I think if you’re on the DOR list from spot checks at weigh stations you should win the excessibe baller prize.

Ha. A rather ignominious award.

[Brian_G_r_a_f_s_t_r_o_m]

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, …

There’s a pretty good discussion of the impact of the decision here:
The Implications of the Supreme Court’s Wayfair Decision | The Regulatory Review

This is a great article. Thanks for posting, John. Right about now, I’m glad I never purchase wine from retailers outside my home state, a luxury that living in CA reasonably allows me.

Joe,
I’d pay the taxes.

[Robert_M_yers]

I didn’t think states had in the past tried to collect sales tax on sales leaving that state. That’s what made buying out of state so attractive, not just for wine.

They do now but seemingly only for wine, which for us could be a problem when each state starts staking it’s claim. I’m all for paying fair tax, but don’t see how this one will be resolved once the receiving state realizes what’s going on.

I think it’s well beyond wine at this point - most major retailers are now collecting the sales tax of the state to which the online order is being shipped. Prior to Wayfair states were not able to collect that tax (or at least couldn’t enforce their tax rules against out of state shippers with no in-state presence). Now they can.

So, what you should be paying is your state’s sales tax on any shipments, wine or otherwise, to you.

So your suggesting to pay the NY tax and then claim local taxes?
No other online order besides wine charges tax from the purchased state, it’s all from the delivered to state.

Or will the correct answer to the tax man be, no I paid taxes already in NY you see. I purchased those online and took delivery via proxy in NY when I purchased them, the disclaimer told me so?

I’ve yet to hear anybody tell me outright that we now need to pay double tax or the opposite which is I’m cleared of local tax responsibilities because I’ve paid my taxes via a virtual purchase in another state.

[Rich_Salsano]

You definitely do not owe double taxes. Most states offer reciprocity for taxes paid to another state.

[AndrewH]

They do now but seemingly only for wine, which for us could be a problem when each state starts staking it’s claim. I’m all for paying fair tax, but don’t see how this one will be resolved once the receiving state realizes what’s going on.

I think it’s well beyond wine at this point - most major retailers are now collecting the sales tax of the state to which the online order is being shipped. Prior to Wayfair states were not able to collect that tax (or at least couldn’t enforce their tax rules against out of state shippers with no in-state presence). Now they can.

So, what you should be paying is your state’s sales tax on any shipments, wine or otherwise, to you.

So your suggesting to pay the NY tax and then claim local taxes?
No other online order besides wine charges tax from the purchased state, it’s all from the delivered to state.

Or will the correct answer to the tax man be, no I paid taxes already in NY you see. I purchased those online and took delivery via proxy in NY when I purchased them, the disclaimer told me so?

I’ve yet to hear anybody tell me outright that we now need to pay double tax or the opposite which is I’m cleared of local tax responsibilities because I’ve paid my taxes via a virtual purchase in another state.

No, I’m saying that you should pay the relevant sales tax for the state you live in or have the wine shipped to (which usually are the same, but if not, the state to which it’s shipped). Many online commerce companies do this now already. If they don’t, and don’t charge tax, them you’re usually responsible for paying your home state’s sales tax although it’s rare that you’ll get caught if you don’t.