Calculate Your Sales Tax BEFORE Checkout When Ordering Online

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Ezana4CE

Ezana4CE

Member
Jan 15, 2021
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Texas, United States
Fiscally minded air gunners and folks on a budget. Excessive sales tax charges have been an issue for me with several online vendors. I think it occurs for different reasons. I don’t believe many companies are overcharging intentionally. However, I budget my hobby spending and have found several discrepancies in orders placed over the past year. Consequently, I have contacted and received refunds from several companies that have charged me a higher sales tax rate. Often times on the checkout screen I will see “estimated tax” as a part of my grand total before checkout. Many times that number does not change after I input my shipping info. Most often I don’t see an explanation for the estimated rate. I’m sure it’s happened to many of you as well. Here’s how I handled this issue and have been successful each time. 

1) Know or look up your state’s sales tax rate if your state has one. Then look to see if your county/parish and/or city has an additional sale tax rate. Add the local tax rate to the state tax rate. For example if your state sales tax rate is 7.25% and your county sales tax rate is 1.75%, your combined sales tax should be 9%. 9% is expressed as 0.09 when using as a multiplier in calculating sales tax in dollars. 


2) Multiply the listed price of the item you intend to purchase or your cart’s subtotal by the combined sales tax rate. Some vendors tax shipping costs as well. 

For example, you want to purchase Benjamin Marauder for $549.99 and a three tins of pellets $35.97 (3 tins x $11.99 each = $35.97) your subtotal would be $585.96. IF your combined sales tax rate is 9%, multiply $585.96 x 0.09 which equals $52.7364 (round it to $52.74). Next add your sales tax $52.74 to your subtotal $585.96. $52.74 + $585.96 = $638.70. 


3) Then compare what you calculate to what you are being charged. From here you have a few options: a) contact customer support before proceeding through checkout and ask them what their sales tax rate is. Depending upon their answer use what you know to remedy being overcharged. b) Complete your order, contact customer service or support after your card/account has been charged. I think sending an email or using live chat and providing your order number, a description of your issue, your calculations using the correct tax rate, and the difference between what you were charged and what you should have been charged are best because you an easy to access record of the explanation and proposed solution to the issue to refer to in the even discrepancies arise in the future. For chat conversations save, screenshot, or take a photo of the conversation for your records. In your correspondence include a polite request for a refund of the difference once you are sure of your calculations. c) Shop elsewhere. 


Keep in mind that some companies don’t charge sales tax for out-of-state orders. Others may inadvertently charge you the tax rate of the state that the company is based in. A few will pass credit card processing fees (clearinghouse fees) on to consumers disguised as a part of the sales tax. It may seem small, but whether you are spending $20 or $2000, overages can add up and amount to personal loss. I hope this helps someone avoid losing their hard earned money. 
 
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I live in California where sales tax is charged. What I don’t understand is how or why some vendors in other states charge me sales tax, supposedly because my order is being shipped to a state that charges sales tax. Then I go to a different vendor, buy a $2000 air gun and they don’t charge sales tax for on line orders also being shipped to California. I’ve asked about it over and over when I’m charged sales tax and the vendor always tells me a law was passed and they are liable for the sales tax in my state. How is it that other vendors are not liable for the sales tax? Certainly if these vendors were really liable, the IRS would be all over them. 9.25% on a $2150 air gun is almost $200! It makes me wonder if the vendors charging sales tax are really paying it to the state or keeping it for themselves. I’m not making accusations! I simply don’t understand why some charge sales tax and others don’t. Not charging sales tax is an unfair advantage for some retailers and why I almost alway order expensive items from out of state by those that don’t charge it.

Anybody know why some vendors are supposedly liable and others are not or how that actually works?

Have a great weekend!

Stoti
 
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@Stoti I believe some states states charge sales tax for online orders shipped out-of-state (more within the past couple years) because their governments require them to charge sales tax for out-of-state orders. This is a growing trend since the South Dakota v. Wafair Inc. Supreme Court ruling ruling a few years ago. Here’s a link to United States Supreme Court Justice Kennedy’s opinion on the case https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf

Here’s a link to a simpler explanation of the ruling’s implications 

https://www.cnbc.com/2018/06/21/heres-what-that-supreme-court-sales-tax-decision-means-for-you.html

As I understand it, the bottom line is that states can require vendors to collect and remit taxes to them in order to boost sales tax revenue. Enforcement of these types of mandates haven’t been worked out or uniformly enforced and also states haven’t mandated this sort of tax so some folks still skate. Some entities remit these taxes on their honor. That’s my general understanding in a nutshell. 
 
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@stoti It’s been at least a year since I read up in any of this, but enforcement is definitely a factor. Enforcement has been very relaxed. Some states haven’t even passed enforcement mandates through their Houses although you may find it on the agenda. Last I checked it was left up to each state to enforce mandates which would explain disparities when shopping between vendors in various states. As for entities that voluntarily remit taxes on their honor, some do so in order to avert future issues with the IRS if there’s a stronger federal push to enforce laws based upon the ruling. Again, this is all from my rudimentary understanding. I didn’t try to analyze much of what I retained beyond how the ruling affects me in conducting interstate commerce. If you understand, read, or find anything different please let me know so I can stay abreast of more recent developments. 
 
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>>The Act covers only sellers that, on an annual basis, deliver more than $100,000 of goods or services into the State or engage in 200 or more separate transactions for the delivery of goods or services into the State.

So that would mean the seller legally needs to track their sales or transactions for each state or make an estimate from a previous year. Since the clause above has an "or" in it, the $100,000 is a red herring..as the seller only needs to make 200 "transactions"

Further into the South Dakota ruling...

>>The Act applies only to sellers who engage in a significant quantity of business in the State, and respondents are large, national companies that undoubtedly maintain an extensive virtual presence.

Not an attorney, but "significant quantity of business" or "large, national companies" does not seem to apply to most airgun product companies or sales. Sell 200 tins of pellets and you're subject to collecting taxes for 49 states in which you and your business don't reside or have a presence? Sounds fair.

I'm surprised the EU doesn't try to make US sellers pay a VAT on transaction shipped to or from Europe. European sellers do not charge the VAT if you are in the US.

If I were interpreting the SCOTUS ruling, I would not collect out of state sales tax until my sales into a specific state reached the $100K / 200 transaction point. And then I would only pay after that threshold were reached. It would be a high quality problem to have, though.

I'm surprised that some industrious federal attorney has not tried to tax gmail, yahoo, cox,, etc. on e-mail services for USPS "mail" delivery depredation. It would appear on the surface that the South Dakota ruling allows it.

There are companies that I purchase from that do not adhere to the "must charge sales tax ruling". Those are the places I shop online.




 
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I live in California where sales tax is charged. What I don’t understand is how or why some vendors in other states charge me sales tax, supposedly because my order is being shipped to a state that charges sales tax. Then I go to a different vendor, buy a $2000 air gun and they don’t charge sales tax for on line orders also being shipped to California. I’ve asked about it over and over when I’m charged sales tax and the vendor always tells me a law was passed and they are liable for the sales tax in my state. How is it that other vendors are not liable for the sales tax? Certainly if these vendors were really liable, the IRS would be all over them. 9.25% on a $2150 air gun is almost $200! It makes me wonder if the vendors charging sales tax are really paying it to the state or keeping it for themselves. I’m not making accusations! I simply don’t understand why some charge sales tax and others don’t. Not charging sales tax is an unfair advantage for some retailers and why I almost alway order expensive items from out of state by those that don’t charge it.

Anybody know why some vendors are supposedly liable and others are not or how that actually works?

Have a great weekend!

Stoti
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>>The Act covers only sellers that, on an annual basis, deliver more than $100,000 of goods or services into the State or engage in 200 or more separate transactions for the delivery of goods or services into the State.

So that would mean the seller legally needs to track their sales or transactions for each state or make an estimate from a previous year. Since the clause above has an "or" in it, the $100,000 is a red herring..as the seller only needs to make 200 "transactions"

Further into the South Dakota ruling...

>>The Act applies only to sellers who engage in a significant quantity of business in the State, and respondents are large, national companies that undoubtedly maintain an extensive virtual presence.

Not an attorney, but "significant quantity of business" or "large, national companies" does not seem to apply to most airgun product companies or sales. Sell 200 tins of pellets and you're subject to collecting taxes for 49 states in which you and your business don't reside or have a presence? Sounds fair.

I'm surprised the EU doesn't try to make US sellers pay a VAT on transaction shipped to or from Europe. European sellers do not charge the VAT if you are in the US.

If I were interpreting the SCOTUS ruling, I would not collect out of state sales tax until my sales into a specific state reached the $100K / 200 transaction point. And then I would only pay after that threshold were reached. It would be a high quality problem to have, though.

I'm surprised that some industrious federal attorney has not tried to tax gmail, yahoo, cox,, etc. on e-mail services for USPS "mail" delivery depredation. It would appear on the surface that the South Dakota ruling allows it.

There are companies that I purchase from that do not adhere to the "must charge sales tax ruling". Those are the places I shop online.



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Good question and a good answer. We can all thank the SCOTUS and Wayfair for having to pay tax on our out of state purchases.

I'll never buy anything from Wayfair. Ever.

It's a no-brainer for me, if I'm going to spend $2000 on an air rifle, I'm sure as heck not going to buy it in California where I'll have to spend another $200 in sales tax. In fact, one of the first things I do when shopping for an expensive item is to look for vendors who aren't going to fleece me for the usurious sales tax required by Los Angeles County.
 
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Knowing why online taxes function the way that they do is cool, it’s good to be aware as tax laws evolve. Be mindful that while things are currently this way to check the rate you’re being taxed when you place your online orders. All companies have been good about crediting me the difference when I point out overages. Hopefully some of y’all find the info helpful and save what’s rightfully yours. 
 
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The reason this even really came to my attention was because little vendors on EBay were charging me sales tax but larger retailers were not. I asked if they are paying these taxes to my state and all of them said, “of course”. When I asked them why some vendors charge me sales tax and others don’t, they told me, “because we’re doing the right thing, we can’t speak for others”. Sounded good to me and that could very well be the truth. Maybe I’m just suspicious but this leads me back to my initial question...If there is no enforcement, how do we know these smallish sized vendors aren’t just keeping the money and padding their profits? Times are tough, I can imagine this happens much of the time.

Stoti
 
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The reason this even really came to my attention was because little vendors on EBay were charging me sales tax but larger retailers were not. I asked if they are paying these taxes to my state and all of them said, “of course”. When I asked them why some vendors charge me sales tax and others don’t, they told me, “because we’re doing the right thing, we can’t speak for others”. Sounded good to me and that could very well be the truth. Maybe I’m just suspicious but this leads me back to my initial question...If there is no enforcement, how do we know these smallish sized vendors aren’t just keeping the money and padding their profits? Times are tough, I can imagine this happens much of the time.

Stoti
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@Stoti in your example I’m confident that the states the sellers were in was a factor as well as when it occurred. This also where the “on their honor” thing comes into play. I’ve run a small business with an online component and have been questioned skeptically about taxes. I was under the impression that this particular customer’s line of questioning was a result of his encounters with other businesses with different practices. All I can really say is stick with companies you believe to be reputable if you’re concerned about whether or not they’re actually remitting sales tax to the proper authorities. If you’re really concerned about a company’s reputation you can look up their standing with the office of the comptroller, treasurer, or department of revenue for the state via the respective authority’s website. It may be more difficult obtain that info at the county/parish and municipal level. Also in your example consider that many eBay sellers aren’t companies or sole proprietorships. Many are probably just regular folks peddling goods trying to make a few bucks. In that case I don’t know if they’re required to collect and remit sales and use tax.Aside from that I’m not sure what else to tell you. 
 
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I was wondering if it had to do with enforcement. It’s a total disadvantage to those retailers who do collect sales tax or sell from states where it’s collected. Why pay an additional tax of $200 for an air gun when you can buy it elsewhere and save that $200. 

Stoti
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It is largely a matter of enforcement, Stoti. Because there is such a discrepancy - sellers that don't charge sales tax have an advantage over sellers that do, on the final price of the item for sale - your state has kindly come forward to fix this issue.

In California, there is a little gotcha called "Use Tax" that you may find interesting. In order to level the playing field for in-state merchants that must collect sales tax, California decided that it would collect sales tax on all untaxed out of state purchases. How do they do this? Well, if you purchase an item out of state without paying CA state tax ,you must report it on your CA State Income Tax Return (there is a Worksheet for it in your Return) and pay the actual State Sales Tax on that item! 

Directly from the California Department of Tax and Fee Administration (Whose slogan is: California Use Tax, Good For You. Good For California.):

"California's sales tax generally applies to the sale of merchandise, including vehicles, in the state. California's use tax applies to the use, storage, or other consumption of those same kinds of items in the state.

Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state.

For these purchases, the buyer is required to pay use tax separately.

Many smart shoppers can find bargains online, but don't realize they can incur a tax bill in the process. California law requires tax on in-state purchases, and also requires tax on items purchased out-of-state for use in California."

Have fun with this. I know it's almost tax time and all of you Californians will be filling out your Tax Returns and reporting all of your online/out of state purchases so you can pay the proper sales tax to your state.


 
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Knowing why online taxes function the way that they do is cool, it’s good to be aware as tax laws evolve. Be mindful that while things are currently this way to check the rate you’re being taxed when you place your online orders. All companies have been good about crediting me the difference when I point out overages. Hopefully some of y’all find the info helpful and save what’s rightfully yours.
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This is still occurring. While you all are spending your hard earned cash in preparation for Christmas, please check your tax rate before placing your order to make sure you’re paying the correct rate. Some may have to look up their combined state and municipal/county sales tax rate. 


I can say this, my state tax rate is 6.25%. This issue comes up more with Optics Planet/DVOR. I spoke with a representative with DVOR who explained that they basically use the same system that inputs the tax rate for each state when orders come through. This causes me to be taxed at a rate that may only be applicable for residents of metro areas like Austin, Dallas, San Antonio, or Houston where there may be an additional municipal sales tax in addition to state sales tax. Is this inconvenient? Yes. BUT their reps have always been accommodating when it’s on my mind to catch it and I bring it to their attention. I’m trying to see if they can get their IT department to address the issue since the rep contacted the IT department this time. I think it’s a good idea to remain vigilant about online sales tax rates in general, but especially during peak shopping season. 


If you’ve been overcharged, calculate the correct charges, subtract them from what you were charged, and call or email the company with your order number and the difference in order to request your refund. I hope this helps y’all during this holiday season. 
 
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If I am making a large purchase, I always check the price with sales tax and then without. Two vendors may have the same weapon for the same price but one charges tax and the other does not. I then look at shipping and handling cost. It is a total package cost comparison before the purchase button is pushed. I live in Alabama (thank God) and AOA does not charge sales tax but Pyramyd does but AOAs shipping and handling is more. Sometimes Pyramyds total cost is less even with sales tax. I recently purchased two HW100s from AOA. They were on special with free shipping, no brainer, AOA = NO TAX. Pyramyd is the only airgun product retailer that charges me tax. Their products and Airgundepot ship from the same warehouse in Ohio but Airgundepot does not charge tax. 
 
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stoti said:
The reason this even really came to my attention was because little vendors on EBay were charging me sales tax but larger retailers were not. I asked if they are paying these taxes to my state and all of them said, “of course”. When I asked them why some vendors charge me sales tax and others don’t, they told me, “because we’re doing the right thing, we can’t speak for others”. Sounded good to me and that could very well be the truth. Maybe I’m just suspicious but this leads me back to my initial question...If there is no enforcement, how do we know these smallish sized vendors aren’t just keeping the money and padding their profits? Times are tough, I can imagine this happens much of the time.

Stoti
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It is Ebay Company that is charging you the sales tax on new and used items. Texas + city sales tax 8.25% -- Ebay has charged up to 9%
Plus I call around to dealers and the first question is do you charge out of state sales tax ?
 
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