I’m in IT and just picked up around 500 laptops for a Windows 11 update across our remote workforce. Many are in California, but these were bought in Oregon where there’s no sales tax. I was planning to send a bunch to our IT team in California, but someone told me it might be tax evasion because I didn’t pay taxes when buying them in Oregon. Do I need to wait or do something else before shipping? Does opening the boxes first make a difference? I have to send these to various states, mostly to departments or individuals at my company. Any advice?
You’ll probably have to pay use tax in the states where the laptops end up.
River said:
You’ll probably have to pay use tax in the states where the laptops end up.
Interesting… I wonder if our shipping team handles this part.
River said:
You’ll probably have to pay use tax in the states where the laptops end up.
Interesting… I wonder if our shipping team handles this part.
Nah, this is something your finance or tax team should take care of.
@Sage
I’m a tax director. Your procurement team should let the tax team know when this kind of thing happens.
Timber said:
@Sage
I’m a tax director. Your procurement team should let the tax team know when this kind of thing happens.
I’m with procurement, and tax teams are not always the best at catching this stuff even when we notify them.
River said:
You’ll probably have to pay use tax in the states where the laptops end up.
Actually, moving equipment like this doesn’t always mean a use tax applies. It typically depends on whether the item was bought for resale or large construction stuff. But since these laptops haven’t been ‘used’ before relocation, you might still owe taxes.
@Thorne
It’s funny how you’re getting downvoted by the ‘experts.’ If they’re being tagged and imaged, they’re basically in service.
It seems like your company is big, considering the number of laptops you’re buying. Don’t they have a process to figure out if use tax is owed on products that didn’t have sales tax at purchase? It’s a basic control most big companies should have. Auditors usually look at these situations closely, especially when no tax was paid. You should talk to your accounting or tax team about this before it becomes a problem.
You’ll probably owe use tax where the equipment is used. But you can avoid double taxation because any sales tax already paid to another state would reduce the use tax owed. Since you didn’t pay sales tax, you’ll definitely owe something. It’s not really evasion, just a different tax payment method.
Yep, I work in sales tax for New York. When you bring something into a state where sales tax wasn’t charged, use tax kicks in. Even if you paid sales tax elsewhere, you’d still owe the difference to New York if it’s brought here.
It’s only tax evasion if you don’t pay the use tax in the state you ship the items to.
You’re supposed to pay use tax in the state where the laptops are used, and a few hundred machines probably won’t go unnoticed. It’s not the same as someone buying a few thousand dollars of electronics in a tax-free state and bringing them back home.
California regulation 1620 is clear—if you’re buying the gear to use in California, you owe use tax to California. There are some exceptions, but I don’t think they apply here.
The South Dakota v. Wayfair decision made this more complicated. While efforts have been made to simplify compliance with remote sales tax, it’s still confusing. The U.S. Senate Finance Committee recently discussed providing relief for small businesses in this area. Here’s a link to the hearing if you’re interested: small business relief hearing
Which state are you taking delivery in? Are you drop shipping to the end users or getting everything delivered to your location first?
Jem said:
Which state are you taking delivery in? Are you drop shipping to the end users or getting everything delivered to your location first?
We’re getting them at our Oregon campus (huge site) and shipping them to remote workers. Most of them are in California, and I was hoping to send a batch to our California campus for easier distribution. But someone mentioned we’d have a tax issue because they were bought in Oregon without sales tax.