My customer lives in another state. If I charge them Indiana sales tax will they have to pay the sales tax again when they register and/or title their purchase in their home state?
All states are mandated to give credit for a legally imposed sales tax paid to one state against another state’s sales/use tax. This is due to the United States Commerce Clause, which is a federal statute. Thus, if your customer lives in another state, that state should allow the amount of sales tax paid to Indiana as a credit against the amount of sales or use tax due. Your customer may have to pay an additional amount if their home state has a higher tax rate than Indiana or if their state has any local (non-state) imposed taxes. Example: California currently has a state rate of 7.25% plus local taxes. If Indiana sales tax of 7% is paid at time of purchase your customer will only have to pay California the extra .25% state sales tax plus any local taxes due in California. They will get credit for the 7% paid to Indiana, thus no double-taxation. (see warning below) Warning – A few states impose a tax different from a sales/use tax, often termed an excise tax. Because the tax is not th
Related Questions
- My customer lives in another state. If I charge them Indiana sales tax will they have to pay the sales tax again when they register and/or title their purchase in their home state?
- My customer lives in another state. If I charge him Indiana sales tax, will he have to pay the sales tax again when he registers and/or title his purchase in his home state?
- If it is required by state or local law for a seller to pay a portion of the total charge for transfer taxes, on what line should the seller’s charge be listed on the HUD-1?
