ULPT Request: not paying sales tax
Posted by KrakenBitesYourAss@reddit | UnethicalLifeProTips | View on Reddit | 23 comments
What could happen if you theoretically pretend that you live in a state without sales tax, provide the correct CC number, and pay no sales tax?
DJlazzycoco@reddit
Sales tax is based on the state the purchase is made in, not where you live. Online shopping calculates it using your billing address, in person it's calculated automatically by the POS. At least in the US
KrakenBitesYourAss@reddit (OP)
If you specify New Castle, Delaware as your delivery address you avoid the sales tax on Amazon, why is that?
DJlazzycoco@reddit
Are you in Delaware to get the package?
KrakenBitesYourAss@reddit (OP)
I can arrange it being picked up there and be sent to me in NY
DJlazzycoco@reddit
Okay then, go for it
KrakenBitesYourAss@reddit (OP)
So this is doable without legal repercussions?
jetty_junkie@reddit
It’s tax evasion if anyone took the time to look into it and cared enough to prosecute you. Unless its big money I doubt you’d ever get in any trouble
Grom_a_Llama@reddit
I live in a state with sales tax and work in a state without sales tax.
Any online purchase more expensive than a fart gets sent to my work address. It's a perk of my job as far as I'm concerned. If anyone ever accused me of "evading taxes" I would just say "I'm not home all day because I'm at work and don't want my packages stolen"
Is this legally sound?
jetty_junkie@reddit
It’s legally sound if you are then amending your state income tax return and paying it back to the state you live in. If you aren’t that’s still tax evasion . Let’s face it. Nobody does that and nobody gets prosecuted for it
jetty_junkie@reddit
But even if he is you were wrong in saying the shipping address doesn’t matter
jetty_junkie@reddit
Because that’s where you take possession and that’s almost always how it works. There used to be a common “ scam” that NYC retailers would do for out of state customers. Basically you’d go to a small store in NYC and buy a big ticket item, let’s say a Rolex watch for example. You’d pay for it in the store, take the watch out with you and the store owner would mail the empty box to your address out of state, because you weren’t an NY resident and the box was being shipped out of state the store wasn’t required to collect the sales tax, so the store owner got full price for his item and you got a 7% ( or whatever) “ discount “ by not paying sales tax since there was a paper trail of you not taking possession in NY
KrakenBitesYourAss@reddit (OP)
Hm, interesting. What happened to that scheme?
jetty_junkie@reddit
it might still be a thing, I’m not sure . but it was super common back in the day.
jetty_junkie@reddit
That’s not always the case. Many times it is based on your shipping address. I could live anywhere but if I have an item shipped to DE for instance I won’t get charged tax but if I ship the same item from the same seller to a different state I will get charged that stated sales tax
Macbookaroniandchez@reddit
Correct. Similar to the concept of FOB, the moment an item is taxable is when the item transfers from merchant ownership/inventory to your ownership.
if I physically purchase a $1,000 light at Home Depot in New Hampshire, the item becomes mine upon purchase, and I pay New Hampshire sales tax - none. If I have that same light delivered to my home in Vermont, likely from that same store, since the transfer of ownership happened in Vermont, I am charged Vermont + Local sales tax - 7%.
DJlazzycoco@reddit
Shipping, billing, whatever but point is unless you actually are there to get the package pretending does you no good
jetty_junkie@reddit
But you specifically said sales tax is based on the state where the sale takes place but that’s inaccurate. It’s based on where you take possession. So if I live in NY I could buy an item online from a retailer in Chicago but if I ship it to my sister in DE I could avoid paying sales tax
DJlazzycoco@reddit
Yeah the technicalities still don't really matter unless you have someone there to get it for you, who doesn't mind paying more than what the sales tax would have been to ship the item to you.
jetty_junkie@reddit
But it’s not a technicality. You said tax is based on where the sale takes place . In my example we could argue that the sale “ takes place” in either NY or IL but it’s the place where possession is taken (DE in my example) that matters as far as tax is concerned You aren’t wrong because of a “ technicality “.
IAmTheLizardQueen666@reddit
Your credit card will decline if the address provided doesn’t match your account address on file.
KrakenBitesYourAss@reddit (OP)
Not necessarily, you can create virtual cards
thekyledavid@reddit
What could happen: Technically, it is considered illegal to purchase an item in a non-sales tax state if you intend to use it in a sales tax state. This is why the legal term is “Sales and Use Tax”. If you buy something in a non-sales tax state and bring it back to your sales tax state to use it, you are technically committing tax fraud unless you file a Sales and Use Tax return to claim the item you bought tax-free.
That being said, realistically, you aren’t going to get caught for this unless you regularly buy substantial items. If you want to buy 1 reasonably priced item, they will almost certainly never catch you
Disclaimer, This is not legal advice, don’t commit a crime just because someone on Reddit said you could get away with it
jetty_junkie@reddit
By law it’s not illegal to for , say a NJ resident , to drive to DE and buy an expensive item and not get charged sales tax. But , if you do that you are supposed to disclose it on your state tax return and pay the tax. It’s basically tax evasion not to, but if your just a basic consumer buying stuff here and there for your personal use you’ll probably never have anyone so much as question it