'Curious' About Sales Tax While Shopping Online
WBZ
No shopper likes to pay the state's sales tax. Some people are confused if they should be paying when they buy online or order something over the phone.
Mike from South Wellfleet wrote this on our curiosity Web site: "My wife recently placed an order with L.L Bean. She was told that because they have a company store in Massachusetts, they have to add the 6.25 percent sales tax. Is this correct?"
The quick answer for this specific question is yes, but that isn't always the case, according to state law.
We decided to call L.L Bean ourselves and inquire about a kayak. The clerk said we would have to pay $39.31 in sales tax because we gave Massachusetts as our home state. We then called Cabela's, another specialist in outdoor gear. In that case, we would not have to pay any sales tax.
What's the reason for the difference? It's just like Mike's wife was told. Because L.L Bean has physical stores in Massachusetts, they have to collect the sales tax on all sales, whether they are online or over the phone. Cabela's does not have any stores here, so they don't have to collect the sales tax.
Shoppers in Boston told us they think this system is confusing. That's despite the fact it happens all the time. For example, we checked out a Julia Child cookbook on Amazon, which has no stores in state, and found we could get the book with no sales tax. Go to Borders.com and you have to pay almost $4 in sales tax.
Ditto for kitchen goods. At Overstock.com, there was no tax charged on a set of canisters. But at Macys.com we would have to pay another $3 in sales tax.
One shopper said it would make her think about shopping online more often. Another young man agreed that he too would now be more inclined to shop online with retailers who don't have stores in state.
Being put at a competitive disadvantage is exactly what worries bricks and mortar retailers like the Wellesley Booksmith. Lorna Ruby says, particularly these days, consumers are very cautious of how they spend their money. "They are pretty savvy, and know that when they buy online they don't have to pay the sales taxes."
Bob Bliss with the Department of Revenue says the system works as follows: "If you buy it in Massachusetts, it's called a sales tax. If you buy it outside of Massachusetts and bring it into Massachusetts for use, it's called a use tax."
Here's how that system is supposed to work. Consumers are actually supposed to voluntarily fill out a form and send in an equivalent amount to the sales tax. Bliss admits they don't collect much. "There has got to be several hundred million dollars, I would think, potentially in use tax that is not collected."
And that means shoppers aren't shopping local stores. As one shopper said about this tax system, "It's confusing and its sets us up not to shop online at the local retailers and that's unfortunate."
Bliss did say there are some federal proposals to create a uniform tax system for online retailers, but that there is no sense on when, or if, those will be enacted.
© MMX, CBS Broadcasting Inc. All Rights Reserved.
