cross-posted from: https://lemmit.online/post/3922769
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The original was posted on /r/linustechtips by /u/RevolutionaryAd8204 on 2024-09-14 15:50:43+00:00.
how does this work if you live close to another state? As in if you live in a state with sales tax but down the road is a state without sales tax- why ever shop in your state?
As in if you live in a state with sales tax but down the road is a state without sales tax- why ever shop in your state?
Mostly the states are quite big, so it’s not worth the trouble. But along various state borders, it distorts the shopping experience in odd ways.
I’ve been to towns that are missing common retailers entirely, because everyone drives to the next town over (in another state), to avoid a tax.
We also have a rich history of driving across state lines to purchase stuff that’s illegal in our own state. It’s also illegal to bring it back, but the borders aren’t patrolled, so the only way to get caught is to have a traffic violation while doing it.
Or so I’ve heard. I never break any laws, myself.
In some cases like that, where you’re in a state that has no sales tax, but near the border of one that does, they’ll actually check ID and charge you sales tax if you’re from the sales tax state.
In most countries it’s the sale point which matters, not which state you reside in, for indirect tax. I would assume it’s the same in the US. For example if you’re on holiday in a different state or country, they wouldn’t charge what you’re charged back home.
Yep, but the states with sales tax get tired of getting cheated out of their tax revenue. The specific example where I saw this was a major hardware store chain in Oregon (no sales tax) right near the border of Washington (6.5% sales tax). They asked everyone “Washington or Oregon” at the register and checked ID for anyone who said Oregon.
Quick search says that Washington considers it a “sales and use” tax, so anything purchased out of state, but intended for use in Washington is supposed to be taxed. Kinda messed up, really.
To put details to other person’s point: Even if you lived pretty close, for a lot of things, the gas cost would probably offset a lot of the savings. For big things for sure it would make some sense but for other things it just wouldn’t make any sense. You’d have to live right on the border and have a town with stores that carry whatever you’re buying also be pretty close.
Convenience. Unless you live right near the border, it’s probably faster/easier to shop in your own state than drive all the way to another.
But if you do live near the border of a state without a sales tax, then it’s pretty common to shop in the neighboring state, especially for larger purchases.
