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Your Take: Would You Ship Out of State to Avoid Sales Tax?

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We know that a sales tax on internet purchases is probably on the way, either federally or slowly expanding across the states, with Amazon firmly in the sights of every state Treasurer. Unless there is a nationwide system, the rates will always vary among the states because they vary right now. The retail sales tax in Virginia is 5% but a hefty 6% in Maryland. Go up to Delaware and you pay no sales tax! (this is one of the reasons why sales tax holidays are always so popular)

Delaware is only an hour and a half away, which makes it impractical for most purchases, but it does start making sense for big ticket purchases like a television. We often stop at the Delaware Costco on drives up to New York or New Jersey in order to buy stuff tax-free (it’s rare and it’s mostly alcohol :) ) but we haven’t made a special trip just to buy something and avoid taxes.

But let’s say Amazon started collecting taxes in your state, like Virginia in September 2013, would you ship to a friend or relative in a nearby state to avoid the tax? My in-laws live in Virginia and if they wanted to ship things to our house to avoid the tax, I’d have no problem with it.

{ 21 comments, please add your thoughts now! }

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21 Responses to “Your Take: Would You Ship Out of State to Avoid Sales Tax?”

  1. Colorado has hands down the weirdest sales tax system. It’s so complicated they offer courses for businesses, and those courses are well attended – not your mother’s sales tax.

    That’s the bad news. The good news is someone like Amazon will only be charging the state minimum, which is 2.9%. That’s not worth making big changes for.

    We have a bigger problem here: no Trader Joe’s. We’ve actually rerouted a road trip or two to come back through New Mexico, just so we can stock up on TJ “necessities.” :)

  2. lostAnnfound says:

    In MA there is no sales tax on clothing & food and for years around this time of year we would see cars at the mall with CT plates as families went back to school shopping here to avoid the state tax in CT. Personally I don’t shop online at Amazon to avoid a sales tax, but because of price, availability and selection of goods, so it really wouldn’t change the way I shop. And I wouldn’t go to a different state to shop…would it really be worth the time/gas, etc.?

  3. cubiclegeoff says:

    I shop at Amazon out of convenience more than anything, and don’t really think about sales tax. But there are plenty of people in MA that go to NH to purchase more expensive items without paying sales tax.

  4. mannymacho says:

    I think in more than 99% of cases this would be more trouble than it is worth.

  5. Daniel says:

    Maybe I am unique in this, but I am completely legit about my online purchases, and I file and pay the Use Tax on those items, so if online retailers began collecting sales tax, it would just be easier on me.

  6. freeby50 says:

    I’d be a little worried about transporting alcohol or cigarettes across state lines. Each state has its own laws about alcohol and tobacco taxes and it can be illegal tax evasion to buy out of state and bring it in state without paying taxes. I’ve seen occasional news reports of states stopping people on the highway and checking for booze/smokes. I’m not saying its common at all but it has happened.

  7. No,I would be concerned about paying up if I got caught.

  8. Hell yes I would do this! I would send packages to a friend or let them send them to me. Have you seen the way our gov. uses our tax dollars? Why would you want to give them more money?!

  9. Matt M says:

    I would definitely ship out of state, if they don’t make a federal internet sales tax.

  10. If i had the opportunity and I wasn’t going to pay use tax I would be anything you don’t pay sales tax on you’re generally supposed to pay use tax… not that anyone ever does.

  11. Barb says:

    Your credit card address is the basis of the tax for online purchases. My credit card bill is to my parents address which has a lower tax rate than the city of Chicago (9.75%, highest tax .rate in the country)

  12. shiftomnimega says:

    I am in Delaware often enough to pick something up if I absolutely had to Tax Free. However, I’ve always believed that you should never fear the tax man since taxes on the local level pay their way forward. Federal taxes, I have a mixed feeling about.

  13. Ray says:

    I wouldn’t mind, but your really exchanging variable costs of tax for a fixed shipping cost.

    I’m no where near a tax free state so, they ‘d have to ship it to me, which would be a hassle. I see your point, if I’m already in the state why not?

  14. Shirley says:

    I often buy used books at Amazon and the prices probably average $1.00 while the shipping is $3.99 for each one. If tax is applied to the cost of the product, I wonder if the shipping will likely be considered part of the product and also be taxed. If so, that could be a lot on a high priced item.

    • Jim says:

      I don’t think shipping is ever included in calculating sales taxes since it covers the cost of getting the item to you but isn’t part of the item itself.

      • pashber says:

        It depends on where you live. I live in Seattle (9.5% tax) and buy some things from Costco online. The sales tax is assessed on the product PLUS shipping cost. OUCH!!

  15. LibertyJoe says:

    I do everything I can to avoid taxes. The govt has no right to tax me as I do not want any of the “services” it provides. I do not need criminal overlords deciding how to spend my hard-earned money.

    The shipping required for online sales keeps UPS and FedEx in business and the money saved allows me to purchase other things, all stimulating an economy in need of real stimulus (and which offsets the anti-stimulus of govt spending). Any tax applied will negatively affect the economy and my purchasing power with nothing positive in return.

    Ship wherever you have to to avoid taxes/theft.

  16. Rob says:

    Most people forget the reason we paid no taxes for online purchases was to encourage online purchases in other states which charge shIpping. It equalized the playing field. Now with states strapped for revenues they want to renege on that and any way they can get dollars.

  17. MtnGuy says:

    There is an opportunity cost fo payign the use tax at tax time on your state return and avoiding the cost of sales tax at the point of purchase. Sites like SalesTaxSavings.com can help you avoid sales tax at time of purchase. Just make sure you check with your local statutes.

  18. maclouie says:

    no sales tax for product shipped out of state existed long before the internet. Had nothing to do with encouraging online commerce. Had to do with logistics.


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