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MusicDirect

I was wondering if someone can explain if it is appropriate for a vendor to charge buyers the sales tax rate where the vendor is located instead of the sales tax rate where the purchaser is located, for an online purchase? MusicDirect is located in Chicago where the sales tax rate is 10.25%. I live in Illinois but not in Chicago where the sales tax rate is 6.25%. MusicDirect persists on charging me 10.25% when Amazon, eBay and other vendors charge me 6.25%. They have told me that they charge me 10.25% because the have “a physical nexus to Chicago”. Well I do not. Using MusicDirect’s logic Upscale Audio should be charging me California sales tax, which they do not. Anyone care to explain to me if MusicDirect is correct in their practice and why? Thanks. 
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riley804
1,224 posts
 
Sales tax

Sales tax is a pass-through tax. This means customers, not businesses, pay sales tax. However, business owners must collect, deposit, and report the sales tax.

Businesses that need to collect sales tax must do so at the point of sale. Customers purchasing products are responsible for paying the sales tax.

States can also get specific about which products have sales tax. For example, some states charge taxes on groceries while others do not.

https://www.patriotsoftware.com/blog/accounting/sales-tax-laws-by-state/

https://smallbusiness.chron.com/tax-outofstate-purchases-20811.html

https://www.avalara.com/us/en/blog/2018/11/how-to-handle-sales-tax-on-shipping-a-state-by-state-guide.html

Google is great.

you do have the option to not use them ....
ohlala
1,236 posts
 
I have made three recent MD purchases and was charged my local tax. I am out of state, though.
ebm
9,311 posts
 
If your not happy don't buy from them as they are not the only stereo vender out there.
lowrider57's avatar
lowrider57
5,417 posts
 
because the have “a physical nexus to Chicago”.
If the vendor is in Chicago and has a related business or distribution center in your area, they can charge the tax rate of their main location.


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kingbarbuda OP
514 posts
 
I buy only select open box or other special items with a coupon code from them. But believe me, I do buy the majority of my gear elsewhere. It’s like they are charging me an extra 4% over the posted price. And as we have seen above, if you live outside of IL they charge you your local sales tax, which is where the point of sale is. 
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