[R-390] Green Weanie Trap

[Sheldon Daitch]

Perrier,

In theory, Digi-Key turns that $26.82 back over to the State of 
Tennessee, since that
is the jurisdiction for which it was collected.  It does not go to 
Minnesota.

But the mail order deal gets more interesting.  Tennessee has a use tax, 
which
effectively parallels sales tax.  Again, in theory, if Digi-Key did not 
collect the sales
tax on the sale, the Tennessee based purchaser is supposed to pay the same
amount as a use tax.

Who is Liable for Use Tax? [Tenn. Code Ann.
Section 67-6-203]
When a user of tangible personal property does
not pay sales tax to a dealer, the user becomes
personally liable for the tax. This generally
occurs when a user purchases articles from an
out-of-state dealer not registered for Tennessee
tax. It also occurs when a dealer withdraws
inventory items purchased on a resale certificate
for business or personal use. For example: A
clothing store owner purchases clothing on a
resale certificate then takes items from inventory
for personal use. Use tax is then due on that
clothing.
The use tax rate is equal to the sales tax rate
on both the state and local level. Use tax is
due even when a citizen imports tangible
personal property into Tennessee for use. For
example: A business relocating to Tennessee
brings property purchased in a state with no sales
or use tax. The dealer would be liable for use tax
on this property.

http://www.tn.gov/revenue/taxguides/salesanduse.pdf


How many people actually pay the use tax?

Not many, I suspect.

73
Sheldon


On 10/2/2012 9:21 PM, Perry Sandeen wrote:
> GM list,
>
> I placed a capacitor order with Digi-Key for $291.58, sent the check in the mail to them for the free shipping they advertise in their catalog and currently on line.  I also asked for a catalog.
>
> Then I get an email from them saying I have to pay $26.82 in sales tax.  Since it has taken so long to get it together I paid it.  This comes out to over 9 percent.  The maximum sales tax here in TN is 7.9 percent.  One has to pay that to Digi-Key even if ordered from and shipped out of MN. Neither Mouser nor Digi-Key have a physical presence here in TN.  This is not mentioned in their older catalog that I have or on their online payment information.
>
> Also Digi-Key no longer publishes a catalog.  When I went on line to use their web catalog I found it extremely difficult to use, unlike Mouser’s where one can go easily to the parts page. It is possible that they have the same setup as Mouser but I haven’t tried it yet.
>
>  From my perspective Digi-Key carries a wider assortment of parts that would be useful to people like us.
>
> I called Mouser right after I got off the line with Digi-Key and asked if they charged sales tax on out of state orders.  The answer was no and that had been my experience with several orders in the past.
>
> Although I paid shipping from Mouser, it didn’t come to the 9 percent plus level.
>
> Conclusion:  If you buy from Digi-Key all you need is a nut and bolt as they give you the free screw to pay for the welfare state of MN.
>
> Please feel free to cross-post to other lists.
>
> Regards,
>
> Perrier
>
>
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