I’ve never encountered this before, went to place an order yesterday and I couldn’t get the order to remove NY sales tax. Figured it was a glitch and sent an email in which they responded and confirmed that it was correct. That I was according to recent Supreme Court ruling legally purchasing in their locale now. I guess I was always under the impression that I should be paying my local tax. I asked them if I was still supposed to declare Ohio tax but didn’t get an answer on that. Any idea what’s up?
Maybe a NY thing or something real recent. My latest orders from CA and WA did not charge me their states taxes.
Typically, when you buy out of state the retailers terms are that title passes to you in that state. Thus, the transaction takes place in the seller’s state in this case NY. The retailer only has a license in its home state, so it can’t transact businessin your state. That’s the reason for the retailer’s terms
You’ve already paid sales tax; if your local rate is higher maybe you owe the difference to your local jurisdiction.
Tom is correct, title transfers at the point where a product is delivered. That is the place that the tax is to be charged that local rate and reported to the those local jurisdictions.
Most small businesses are only registered in the state they reside in, and since they don’t report to the state the product was delivered in, a seller may decide not charge that tax to the customer. Businesses are required to report in any state where they have a presence. That can be a physical location or even a remote employee living in a different state, or even if someone from the company travels to that state say for a trade show. Most small companies try to get away without registering in a state for just a remote employee or employee travel.
For example our company has to be registered in 28 states and we have to report to each of them monthly for the revenue for all product shipped in each of those states.
For the OP posters question, if they shipped it to Ohio it was delivered in Ohio and that is the rate that should have been collected if they are a registered business in the state of Ohio. From my experience they should not have charged you NY sales tax if it was not delivered there.
Now while I am not a CPA, our controller is and she reports to me. So we have these kinds of conversations somewhat frequently. I am not up on any Supreme Court rulings, but I do know with the dramatic rise in online sales states are losing tons in revenue tax, which is why you are seeing them crack down on buisiness that do ship into their states and don’t report.
Knowing that, my gut feeling on this transaction is the selling dealer doesn’t want to get caught up in any law changes and get hit with any possible future taxes and penalties so they are reporting to NY that is was delivered there when in fact is was not. Again, can’t be for sure that is the case but I suspect it is.
Mike
To Tom’s point about transference, why don’t any retailers charge their local taxes then? We know NYC just went through a major shipping issue, I’m wondering if this is the compromise? Collect local taxes and we won’t stop your packages.
If this catches hold with everybody I could see this as an unfortunate legit way for states to shut down shipping again. States don’t like losing tax dollars and it’s never worked this way from my end. Somehow I don’t think Ohio is going to go for my “yeah but I paid NY tax line”.
This has been the norm for years.
Do you use Amazon?
You should be happy they can still ship to you considering the current climate.
Maybe I should clarify.
Read the fine print.
This is alcohol. Delivered in NY so NY gets sales tax. If you choose to ship that’s on you.
I haven’t heard this kind of local sales tax claim since the early oughts.
Not a complaint here Brent, just a question. Never paid NY sales tax in 20 years of ordering from NYC, paid Ohio tax.
cap·i·tal·ismDictionary result for capitalism
/ˈkapədlˌizəm/Submit
noun
an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.
If your state is demanding taxes for purchases by people from other states, you live in a socialist state or greedy state. There are cases in court across the nation trying to break the cycle of government regulations driven by distributors to protect/improve their sales at whatever profit margin they want and eliminate competition. It’s sold to politicians that their states are being drained of taxes by out of state retailers, plus the out of state retailers are obviously selling Cristal to your under age children and making them alcoholics.
There are also retailers who are trying anything they can to keep their customer base. Depending on who interprets the law, if your purchase is at their store and taxed, it is your personal property and now the store is “legally” shipping you your personal property. If you purchase a gun, no problem. It can be shipped anywhere and probably won’t even have an “adult signature required.”
The perfect cure is a curse and potential political money grab. If the Feds could initiate a fair trade agreement for all interstate sales by mandating a 2% federal tax on all sales. Feds make a fortune, it’s an even playing field for retailers and the states can’t interfere. Unfortunately, the state, (fed) again has control and the 2% would probably increase exponentially, depending on who is in office.
The pressure by the individual states and distributors have reached on line retail full swing. We have to have three shipping contracts/accounts with UPS. One for wine, one for tobacco products and one for anything else. We used to get lower prices based on how much we shipped, but now that we have three accounts we get few incentives. Add to that we have to use an outside shipper for two thirds of our shipments now because of the individual state clamp downs.
Therefore the answer Robert.
We always had some bs clause for online/shipping orders referencing title passes to owner in NY, sales tax is collected. I’m surprised that you’ve never seen it before.
Also, I guess my Amazon reference proves your point more than mine wrt what sales tax is collected. So, there’s that.
On Zackys’ auction;
**Due to the recent Supreme Court ruling on sales tax, unless customer purchases are being shipped out of the country, Zachys will now collect appropriate sales tax on all orders delivered in states where Zachys is licensed or hold permits, regardless of where customers are shipping their purchases. Please see the web site for the full terms and con…
Astor also does this
The changes is based on a recent SC decision: Supreme Court Confirms Online Wine Tax | Wine-Searcher News & Features
Retailers are beginning to do this now. Read the fine print toward the end of the emails and you will see notice of it.
The California State Board of Equalization states that online retailers charge California sales tax if that retailer has a presence of any kind in the purchasers State of residence. For California residents purchasing online it is the responsibility of the puchaser to declare their sales tax liability and pay via the honor system.
Honor system, LOL.
this is the law of the land, not just for CA, meaning the honor system.
wineries/retailers can collect the out of state sales tax, but there is no mandate. just like charging sales tax on shipping which is also not mandated.
Shipping is labor and non-taxable in CA.
Disclaimer: For my business it is non-taxable, because shipping is a separate charge from goods sold, shipping cost records are kept on file and shipping is not a revenue source (do not charge more than my cost).
Yup. No choice for the retailers.
Dan Posner/Grapes, the Wine Company, White Plains, NY:
Please note that, effective February 1st, as per the decision of US Supreme Court, ALL of your purchases from Grapes The Wine Company will be subject to local sales tax. This effects a small population of our customers, as most of you have already been paying sales tax. Please email me if you have any questions. As a reference, you can read about Wayfair vs. South Dakota here
Max Marinucci, Wine Connection, Pound Ridge, NY:
IMPORTANT NOTICE ABOUT SALES TAX!
Thanks to a recently decided Supreme Court case and legislative efforts in state capitals across the country, retailers everywhere are now required to collect sales tax on all orders, even when they are shipping out of state. The Wine Connection will collect New York sales tax on all sales going forward. We realize that not all of our competitors are up-to-speed on these legal changes, but we expect them all to transition shortly. Many NY stores have adopted this Supreme Court ruling already, and all will need to be compliant by February 1st.
Flatiron Wines:
Important notice to out-of-state customers regarding sales tax: Thanks to a recently decided Supreme Court case and legislative efforts in state capitals across the country, retailers everywhere are now required to collect sales tax on all orders, even when they are shipping out of state. Our New York store will collect New York sales tax on all sales going forward, and our California store will collect Californian sales tax on all sales going forward. We realize that not all of our competitors are up-to-speed on these legal changes, but we expect them all to transition shortly.
No, that was the law, but the Supreme Court ruling changed that, as I understand it. It no longer matters if the retailer has a presence in the state to which it is shipping. The retailer’s home state can collect the tax on shipments going out of state if it chooses (and what state won’t?).
Ha, we buy from the same people. FYI, got charged my home state tax for the last HDH auction. I had not been charged tax by them previously.
This will probably change my buying habits a bit when tax is added on top of shipping. I buy most of my wine locally except when I pillage Max’s sale for Alto Piedmont wines that aren’t available locally.
Effective October 1, 2018 wineries could ship direct to consumer no more than six cases per person per year. They were required to obtain a permit from the ABLE Comission as well as a sales tax permit from the Oklahoma Tax Commission. To fully comply with Oklahoma law they have to remit sales tax to the state of Oklahoma. A report is due annually as is a renewal of the permit.
What’s interesting is that wine.com was listed as a winery on the most recent ABLE commission DTC permit list. I thought that was odd. Do they make their own wine?