Being the Christmas season I thought I would bring up a subject that is near and dear to all of us who would rather not leave our home when shopping for Christmas gifts...
Sales tax on internet purchases.
I bring this up because technically sales tax, up until recently, was only added if you were buying from a web site that was based in your state. Fogdog.com is/was based out of Kentucky and Pennsylvania therefore sales tax was included on purchases from those states.
Last night I downloaded a song off of Apple's iTunes music store for 99 cents and when I get the confirmation email it will undoubtedly be $1.05. I don't have a problem with that too much because it's only 6 cents we are talking about.
(I'm only using Apple as this example because buying Apple products is what caused me to notice this issue.)
Last February/March I decided to purchase a Mac mini desktop computer. It's relatively inexpensive, but we are still talking about a total of about $676 or so after extras were added to the $499 computer and I bought a cool keyboard too. I looked around at a web site I had used before, but for some reason I couldn't get the exact setup (i.e. DVD burner) I wanted from them so I had to go straight through the Apple.com website.
After I had configured everything I went to check out and noticed that, while Apple was so proud to be offering free shipping at that time, they added 6 percent sales tax onto my nearly $700 purchase. Which added up to about $42 give or take.
Now that I have a problem with.
If I had been able to get it through my usual web site they would not have charged me sales tax and would have only charged me shipping. And keep in mind that the box that the keyboard came in was twice as large as the box the 3 pound, yes that's 3 pound, computer came in. Shipping wouldn't have sniffed $42 for ground shipping.
I bought a laptop from my usual web site and shipping was $24 for the $999 computer which weighs 6 pounds. The box was large and bulky for it but sales tax would have been 60 bucks.
After purchasing my beloved Mac mini, I started looking around on the internet for an Apple Store in case I ever needed any repairs. They open one about once a month, but the closest full blown Apple Store to me is in Nashville, Tennessee. And at the time I don't even think there was but maybe one certified Apple repair shop in this state. But it still wasn't an official Apple business.
So my question is, will the state of Kentucky see my $40+ in sales tax money or is this just a way to squeeze a little more out of the consumer?
Do the individual states call up companies that are mainly based on the internet and get their sales tax money from each of them?
Or do the companies themselves operate within the confines of the honor system and cut each state a check for the sales tax cash?
With all of the different web sites I dealt with, some large and some small, it's insane to expect any state to be able to keep up with what they are owed for sale tax collected from all of these companies.
I would love to purchase a G5 Quad Power Mac, but I have to tell you that, even at probably 30 pounds or more, shipping will be a lot less than the nearly $200 in sales tax Apple will be charging me that Kentucky will most likely never see.