Consumer Myth FYI Tips

Paying State Sales Tax

By on April 28, 2014

a cash giftRecently many of us went through the process of filing taxes for 2013. One thing I learned during the process is that purchases made via the internet are subject to state sales or use tax. Because of what I learned, your BBB wishes to pass along the following information.

Since I live in Indiana, during the year, I am required to keep a record of all purchases made where no sales tax was collected. Then I am to pay a “use tax” to the State of Indiana on my tax return the following year. In Indiana, the amount of “use tax” required to be paid is the same amount of sales tax you would’ve had to pay on a purchase made in Indiana. So, if you paid at least 7 percent sales tax at the time of purchase, you do not owe a use tax. However, if you did not pay at least a 7 percent sales tax, you may owe use tax. Indiana isn’t alone in requiring its citizens to pay this tax.

In addition, a business that conducts commerce in a state and has a brick and mortar location in that state, generally must collect the state sales tax even if the purchase is made via the internet or the phone.

I’ve also noticed that one of the largest online sellers, Amazon.com, has begun to assess sales tax on purchases made by Indiana consumers.

For more information regarding the topic of state sales tax, you may visit http://netchoice.org/library/sales-tax-collection-myth-vs-reality/. For FAQs about the Indiana Sales and Use Tax, visit http://www.in.gov/dor/4006.htm#sales.

To obtain information regarding businesses, charities, and other valuable tips, visit bbb.org/evansville where you can Start With Trust®.

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