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Sales Tax

Sales tax is of course an additional charge added to any order based on the value of the order. Usually the cost is a fixed percentage of the cost of the items purchased. Not all orders and not all vendors are subject to sales tax. Here's how the rules work, to the best of my knowledge, within the United States:

  • If your state has no sales tax, then obviously you don't have to pay sales tax. Lucky you. :^)
  • If your state has sales tax and the company you are buying from is located in the same state, you will pay sales tax at the time of purchase. It is usually somewhere between 3% and 10%.
  • If your state has sales tax and the company you are buying from is not located in the same state, you do not generally pay sales tax at the time of purchase. However, if the company has any offices, showrooms or warehouses in your state, they will usually be considered to have a business presence within the state and you will be charged sales tax when you order. Also, some states may require sales tax to be collected regardless of the location of the vendor; you may be required to remit it yourself.

Outside the United States, the rules vary greatly. Sales taxes, sometimes called "value-added taxes", can be very high. Items imported from other countries usually have these taxes added on by customs officials, so they are pretty much impossible to avoid, from what I understand. As always, you should contact the officials in your country to determine your local rules.

Sales taxes can add substantially to the cost of an order, especially for a high-dollar item, so always be sure to include it in your pricing comparisons. For example, 8% sales tax on a full-featured notebook PC can be $300 or more. This can easily tilt a sourcing decision towards an out-of-state company--as long as you feel comfortable with buying a notebook out of state, and as long as you aren't required to pay the sales tax on out-of-state purchases anyway. For smaller items, it's usually not much of a concern, and for purchases under $100 usually is less than the cost of shipping the item from an online store.

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