As a Sales Tax consultant, I am often asked how Internet sales should be taxed at the state level. Until now, I was usually able to respond that the rules varied so from state to state and that few states had detailed rules available, so that compliance with the complex web of Sales and Use tax laws is often difficult.
However, the State of Virginia has made it simple for those making Internet purchases in Virginia. According to a press release I recently received at my office from the Virginia Department of Taxation, Virginia expects her citizens to readily comply with their laws and voluntarily send in sales tax on any purchases they make for which they were not charged sales tax.
Most states have Use Tax laws, which would apply to items purchased out of state and most states collect use tax from individuals on their state individual income tax returns.
Here’s what Virginia says:
“Purchase of goods over the Internet:
“When an individual purchases tangible personal property over the Internet, he or she must practice due diligence and verify that Virginia sales tax is being charged on the item(s) purchased.
“Always remember to check your invoices to see whether you owe Virginia tax. If you ordered an item in Virginia over the Internet and the company did not charge Virginia tax, you owe Virginia sales tax to the Department of Taxation, not the Internet company.”
Virginia is kind enough to provide the following example:
“A Virginia retail business purchases books for its employees as gifts from a book store online. When the invoice arrives the accounts payable clerk notices that the store did not charge sales tax. The accounts payable clerk calculates the amount of Virginia tax the business owes to the Department of Taxation. The clerk then records the amount of tax owed on the company’s ST-9 form and pays the tax to the Tax Department.”
For more information about Virginia’s policy and to review the entire law visit Virginia’s Policy Library on the Tax Department’s homepage at www.tax.virginia.gov.