Sales tax on Ebay sale where commercial seller doesn’t have nexus?
I recently agreed to purchase a piece of Machinery from someone in California. The company I’m purchasing from does not have nexus in Washington state where I live.
They asked if I would have the machine shipped or be picking it up myself. When I offered to drive down and pick it up they sent me an invoice requesting I pay 9.25% sales tax.
This does not sound legal to me.
I understand the Walmart analogy. Does that hold true if I pay for something in advance? In essence, acting as my own shipping company by going down to pick it up.
It doesn’t matter if the company has nexus in Washington. You are paying California sales tax because possession and title to the product passed in California. It doesn’t matter when you paid for it and it doesn’t matter if you are removing it from the state.
If the company had shipped the product, title and possession would pass when you receive the product in Washington, which would make it exempt from CA tax.
Either way, you would still be liable for Washington use tax.
They are correct – if you pick it up in CA you pay CA sales tax, just like if you went into WalMart and bought something while you are in CA.
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If you pick up the merchandise at the place where it is sold, then you must pay the sales tax to the merchant, who must send it to the state.
Even the company delivers it or sends it to you using an actual shipping company (not you), then that does not apply.
In either case, you must pay Washington state use tax later, unless the amount that you may in California sales tax is at least as much as the sales tax would have been in Washington state. The use tax is the amount that sales tax would have been in Washington state minus the California sales tax.
References :
It doesn’t matter if the company has nexus in Washington. You are paying California sales tax because possession and title to the product passed in California. It doesn’t matter when you paid for it and it doesn’t matter if you are removing it from the state.
If the company had shipped the product, title and possession would pass when you receive the product in Washington, which would make it exempt from CA tax.
Either way, you would still be liable for Washington use tax.
References :