sales tax on appliances from out of state?

azhengNovember 6, 2012

If I buy appliances from New Hampshire, and I live in California, do i have to pay any taxes on them?

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attofarad

Legally, you are required to do so. It is calles "use tax." For at least the last couple of years, there has been a spot on the CA tax return that asks whether you owe any, and if so, pay up.

My guess is that CA will start trying to enforce this, with the proliferation of on-line orders. In the past, the main thing that was (is) caught by this is when someone buys a car out of state (say in Oregon where there is no sales tax) and brings it home to CA.

    Bookmark   November 6, 2012 at 6:57PM
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PeterH2

If you are remodeling a kitchen and have a permit, then your local government folks have a written record of you purchasing some big ticket appliances. I suspect that extends to knowing exactly where you bought them, because I think they want to see invoices in order to assess the increase in property value. I also don't know whether they join the dots between the property tax people and the use tax people. You have to ask yourself whether you want to take the risk of not declaring these purchases...

Even in a remodel, it's often possible to delay replacing some appliances until after the permit has been finaled if you are desperate to save a few $$ on your property tax. AIUI, the value of appliances included in a remodel is included in the increase in property value, but appliance replacements at any other time are not counted for that purpose.

(For folks wondering what the heck the obsession with property tax is, the OP is in CA, which has the famous "Proposition 13" that caps property tax increases due to open market valuations. This means local government looks for any and every reason to hike up taxable values.)

    Bookmark   November 7, 2012 at 3:10PM
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weedmeister

There is such a thing as a 'use tax' in different states. But as to a store in NH collecting sales tax for CA, the answer for now is 'no', unless the store in NH has a presence in CA.

This is changing. There is talk about an 'internet' sales tax (flat %5) but it hasn't been implemented.

    Bookmark   November 7, 2012 at 4:52PM
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mike_73

I purchased a Range and hood from AJMadison.com no tax was collected at the time of the sale and I do not plan to pay up. I am only changing my sink counters and appliances also adding a dishwasher. Doing the work myself and paid tax on the other items so I doubt they are going to catch me.

Pennsylvania has added a line to the state income tax return to declare voluntarily the value of items sales tax was not collected on then that tax gets added to your tax bill or taken from any refund they might owe you.So far i have not heard of them going after anyone yet.

    Bookmark   November 7, 2012 at 11:01PM
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azheng

Thanks for your responses attofarad, Peter H2, weedmeister, and mike_73. Since we are hiring a general contractor, it seems like we're going to be paying the california use tax.

Thanks!

    Bookmark   November 7, 2012 at 11:12PM
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pamela928

Here is my post from the Kitchens Forum as someone else has just asked this question:

I didn't know about this law, or that my state of Florida had it. Nearly a year after delivery, I got a bill from the state for the "use tax" including interest and penalty on a large appliance. They are spot-checking trucking companies receipts and are clearly going after expensive items. They didn't even know exactly what the item was--I have to supply an invoice and all the paperwork. I called, complained that I recently spent a long time in the county office becoming a state resident, paying auto transfer tax, etc. and never once did they tell me about my legal responsibilities here, when they could and should have.
They are clearly going after the lucrative stuff. For now, not books from Amazon. But that day will probably come.

    Bookmark   November 8, 2012 at 3:51AM
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herring_maven

azheng: "If I buy appliances from New Hampshire, and I live in California, do i have to pay any taxes on them?"
weedmeister: "There is such a thing as a 'use tax' in different states. But as to a store in NH collecting sales tax for CA, the answer for now is 'no', unless the store in NH has a presence in CA."

Weedmeister has answered a different question than azheng asked. Azheng asked if he (or she) owed taxes; weedmeister replied that the out-of-state seller is not required to collect the taxes that azheng would owe.

Every state that imposes a sales tax has a parallel use tax provision for transactions where the sales tax has not been collected and remitted to the state. A sales tax is imposed on the buyer, and the retailer is merely the state's collection agent; a use tax is imposed directly on buyers for whom a retailer has not collected the sales tax. To the extent that an inference may be drawn from weedmeister's reply that a California purchaser does not owe California a use tax because a New Hampshire retailer did not collect a sales tax, that inference is incorrect.

    Bookmark   November 8, 2012 at 9:14AM
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weedmeister

That isn't what I meant to say. I thought he meant 'would a sales tax be collected at the time of sale?' I was not attempting to infer that no tax would EVER be paid (hence the comment about 'use tax' which others had already explained).

sorry for the apparent misunderstanding.

    Bookmark   November 8, 2012 at 3:27PM
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