Sales Tax for Online Purchase from Co. with no physical location in VT

September 15, 2015 1:36 PM

I just purchased some home automation items from Belkin and was surprised they charged me sales tax when they have no physical location in the state of Vermont. They won't reimburse me without proof from me that Vermont doesn't charge sales tax for such transactions.

At first I contacted Belkin via Twitter and they claimed that I needed a tax exemption status to be reimbursed. I called their customer service number and they said the same thing. Then I got a call back (by my request) from a manager who also said the same thing, but went on to say I could email them proof from my state to be considered for reimbursement. She said that Vermont is a state that they can charge sales tax in, and this is so very contrary to my own knowledge and experience. I have never paid sales tax for any of the many online purchases I have made in the 10 years I have lived here unless the company has a physical presence in the state.

How do I go about finding the law/rules for Vermont so I can get the reimbursement?

posted by terrapin to Shopping (8 answers total)

Best answer: A quick Google search for "sales tax online purchases Vermont," yielded, among other links, this one:

http://www.nolo.com/legal-encyclopedia/vermont-internet-sales-tax.html

I would argue that a company like Belkin would at least have a sales representative in Vermont, who would sell to stores in Vermont that sell Belkin products. That would constitute a "physical presence" under such a law. You're likely out of luck there.

Given Vermont's relatively new "Amazon Law" as also described by that article, perhaps Belkin is a big enough company to trigger the collection of VT sales tax from VT customers.
posted by tckma at 1:43 PM on September 15, 2015 [1 favorite]

I have never paid sales tax for any of the many online purchases I have made in the 10 years I have lived here

I'm pretty sure you're supposed to. There's a line item when you file your income taxes every year for you to charge yourself sales tax for all the online purchases you've made because for so many years online retailers didn't bother with it. TurboTax even has a handy little estimator tool you can use. You have the responsibility to pay sales tax. Belkin is making it easier for you.
posted by phunniemee at 1:46 PM on September 15, 2015 [3 favorites]

Response by poster: They tried to claim they had a store in Vermont, and when I pressed they said "well, not really a store." So I looked up Belkin in Vermont and got a listing for "service centers" in Burlington, South Burlington and Essex. All three have the same phone number ... which is Best Buy.
posted by terrapin at 1:47 PM on September 15, 2015

Response by poster: phunniemee, I understand my tax responsibilities and do pay them that way, but I have never had them charged during the initial transaction.
posted by terrapin at 1:47 PM on September 15, 2015

Best answer: IANAL, etc, and this is not legal or tax advice, this is just my general understanding of things at this stage. Vermont's click-through nexus law won't kick until later this year. But yeah, as a very broad general rule, you can get sufficient nexus for sales tax purposes in a number of ways that don't necessarily involve having an actual office or store in the state, and beyond that, you're supposed to be paying use tax on the purchase no matter what, so there's not actually a legal way to buy something tax-free in states that do this. More than that, I'm not positive, but I'm pretty sure in general that these states don't have laws that PREVENT someone out of state from collecting sales tax so long as it's remitted properly, since they'd prefer to err on the side of an entity with questionable nexus going ahead and collecting. Once they've opted to be subject to those provisions, regardless of whether they had to, they can't give it back to you unless you actually don't owe tax on the purchase at all. Which you do.
posted by Sequence at 1:51 PM on September 15, 2015 [2 favorites]

I am a Sales and Use Tax Analyst. This is not legal advice, but I get thrilled every time someone cares about my slice of tax heaven.

The rules creating nexus go beyond a brick and mortar store. My current employer has a wholesale entity that is registered in virtually all states. This is because we have merchandising coordinators who regularly visit our wholesale customers and guarantee they are merchandising our product in a way consistent with our brand.

Click-through nexus is the next iteration, reflecting technological change in the supply chain. Relevant case law stating it didn't violate the commerce clause was Wisconsin v Wrigley.
posted by politikitty at 2:19 PM on September 15, 2015 [3 favorites]

Best answer: There is nothing stopping any online retailer from choosing to collect sales tax on behalf of any or all states regardless of nexus. Most choose not to because they (incorrectly) believe it is a big pain to handle.

Unless you were charged for sales tax on an item that is not taxable in Vermont, your complaint doesn't really have any merit. Just remember not to include this particular purchase in your use tax for the year.
posted by wierdo at 2:39 PM on September 15, 2015 [1 favorite]

I'm a sales tax attorney, but not yours. I'm with tckma, they very likely have a salesperson, or a repairperson, or someone they pay to do something in the state. Physical presence can be defined very broadly. And as has been said, retailers are always welcome to register and collect sales tax on a voluntary basis.
posted by loolie at 5:05 PM on September 15, 2015