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?
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 his home state has a higher tax rate than Indiana or if his state has any local (non-state) imposed taxes. Example: California currently has a state rate of 7.25 percent plus local taxes. If the Indiana sales tax of 7 percent is paid at the time of purchase, your customer will have to pay only California’s extra .25 percent state sales tax plus any local taxes due in California. He will get credit for the 7 percent 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 t
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?
