Are Sales Taxes Coming To the Internet?
For years congress has been itching to impose a sales tax on things sold over the Internet. Currently if you’re a business that has a physical presence in Montana you are exempt from collecting sales tax for any online sales.
I have a physical presence in Montana. So if someone buys a book from me online they are not charged any sales tax because they have electronically come to Montana to buy my book.
They didn’t go to a local bookstore in their state that charges sales taxes on retail purchases.
Currently there are only five states that do not charge a sales tax — Alaska, Delaware, Montana, New Hampshire, and Oregon.
Tax Freedom Day in Montana Was April 17, 2017
What is Tax Freedom Day? If 100 percent of your paycheck went to pay taxes for the year you’d have to work until April 17 in Montana to pay all your taxes. Of the 50 states we are number 19 — tied with Texas.
Taxpayers in Mississippi only had to work until April Fifth to pay all their taxes — they’re number one.
If taxes were imposed on Internet purchases then that would certainly decrease disposable income because so much of Montana is rural and many things are purchased online due to scarcity of products inventoried locally.
Come To Montana; Buy A Corvette
At one time the number one Corvette dealer in the nation was not in Beverly Hills, California or Long Island, New York — but Laurel, Montana.
No sales tax was one of the reasons. Plus, they went online as Corvette experts and grew the business that way.
For example, California collects a 7.5% state sales tax rate on the purchase of all vehicles, of which 1.25% is allocated to county governments. Local governments, such as districts and cities, can collect additional taxes on the sale of vehicles up to 2.5%, in addition to the state tax.
Good luck buying a $60,000 pickup in California vs. Montana. Who minds an additional $4,500?
Montana is the only state that imposes no sales tax on the purchase of vehicles by its residents, including resident LLC corporations.
If you form a corporation and have a physical presence in Montana it gets even better. If you form a Montana LLC and have it purchase and take title to a motor home or RV, you won't owe any sales tax in Montana.
No sales tax on a quarter million dollar motor home or RV? I’d say that’s a pretty good deal.
I love this state.
Some Final Thoughts
I’m not a fan of a sales tax period — and especially not on Internet purchases. Even though we may hover around the bottom of the wage scale we’d be much worse if we were hampered with a sales tax — particularly on automobiles.
I can’t even begin to calculate what I’ve saved in sales taxes living in Montana vs. living in California or Illinois — my former home state.
Need a motor home or RV? Why not pick it up for less in The Last Best Place on Earth — Montana.