You are correct, virtually every state has a law that says “If you buy something in another state and pay less sales tax than we charge, you owe us the sales tax we would’ve charged you.”
It’s called a ‘use tax’. In practice, nobody pays (personal) use tax, myself included.
So, all of those people going to Oregon to shop without sales tax and not paying use tax were technically breaking the law, not using a loophole. I’m not judging them, I don’t pay use tax either :)
Washington at least will refund sales tax paid for goods purchased in Washington for use exclusively outside of Washington if purchased by residents of US states and CA provinces with low sales taxes, if the forms are followed.
I understand it used to be possible to show ID in store and have sales tax not be applied, but now you need to submit receipts and etc.
Avoiding taxes. It's different. It was always perfectly legal to travel to another state to buy something expensive and bring it back home. No crimes were committed.
It was a loophole that you could buy in Oregon specifically to avoid $1,000s in sales taxes.
> It was always perfectly legal to travel to another state to buy something expensive and bring it back home.
It was legal to do that. If it was purchased out of state with the intent of bringing it back home, then (assuming the home state was California) California use taxes were always owed on it. Other states with sales taxes also tend to have similarly-structured use taxes with rates similar to the sales tax rates.
They were legally avoiding sales taxes, but also illegally evading use taxes, and, moreover, there is very little reason for the former if you aren't also doing the latter, unless you just have some moral objection to your taxes being taken at the point of sale and the paperwork and remittance to the government being done by the retailer instead of being a burden you deal with yourself.
The situation petcat described is tax evasion (illegal, since use tax is due in lieu of paying sales tax at point of purchase, assuming item is brought back to home state).
Tax avoidance is simply minimizing tax liability, completely legal.
If you do not pay sales tax on items bought in neighboring states, you typically owe your state use tax on those items. Many people simply did not report these purchases however, and this is evasion.
quickthrowman|6 months ago
It’s called a ‘use tax’. In practice, nobody pays (personal) use tax, myself included.
Washington has a use tax: https://dor.wa.gov/taxes-rates/use-tax
California has a use tax: https://cdtfa.ca.gov/taxes-and-fees/use-tax/
Idaho has a use tax: https://tax.idaho.gov/taxes/sales-use/use-tax/online-guide/
So, all of those people going to Oregon to shop without sales tax and not paying use tax were technically breaking the law, not using a loophole. I’m not judging them, I don’t pay use tax either :)
toast0|6 months ago
I understand it used to be possible to show ID in store and have sales tax not be applied, but now you need to submit receipts and etc.
petcat|6 months ago
Avoiding taxes. It's different. It was always perfectly legal to travel to another state to buy something expensive and bring it back home. No crimes were committed.
It was a loophole that you could buy in Oregon specifically to avoid $1,000s in sales taxes.
dragonwriter|6 months ago
It was legal to do that. If it was purchased out of state with the intent of bringing it back home, then (assuming the home state was California) California use taxes were always owed on it. Other states with sales taxes also tend to have similarly-structured use taxes with rates similar to the sales tax rates.
They were legally avoiding sales taxes, but also illegally evading use taxes, and, moreover, there is very little reason for the former if you aren't also doing the latter, unless you just have some moral objection to your taxes being taken at the point of sale and the paperwork and remittance to the government being done by the retailer instead of being a burden you deal with yourself.
unknown|6 months ago
[deleted]
lotsofpulp|6 months ago
The situation petcat described is tax evasion (illegal, since use tax is due in lieu of paying sales tax at point of purchase, assuming item is brought back to home state).
Tax avoidance is simply minimizing tax liability, completely legal.
kube-system|6 months ago
hopelite|6 months ago
I’ve never understood people like you that say anything and everything to increase taxes.
How does it make any rational or logical sense that you should pay higher taxes for something?
So when you go to Delaware that has 0% sales taxes, you make sure to log everything and pay taxes to your home state upon return?
kube-system|6 months ago
If you don't, you are technically violating the law. All states with sales tax also have a use tax.
For example, if you are a resident of neighboring Maryland, this is the form you'd need to fill out for purchases you make in Delaware.
https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/f...
bongodongobob|6 months ago