13

States In Which We Require Sales Tax

Mt Baker Vapor will now be collecting sales tax on all orders from Illinois, New York, Tennessee, Washington, Illinois, Pennsylvania, California, Arizona, Wisconsin, Oklahoma, Ohio, New Jersey, Nevada, Georgia, Florida and Texas in response to the State Nexus Law.

The Nexus Law determines whether an out-of-state business selling products into the state is liable for collecting the tax on sales in that state. We have been involved in trade shows and affiliate programs that have made us liable for collecting tax in certain states. This means we will be collecting the standard state tax on every order from the affected states. We apologize for any inconvenience that this may cause.

Please note, if you do not live in the states listed above and below,  you will not be affected by this on your orders.

In addition to the sales tax, the nexus law may also impact the tax on shipping in specific states. Currently California does not charge tax on shipping. However, New York, Texas, and Tennessee do charge taxes on all shipping. Illinois also charges takes on shipping but only on selected items.

You can find a legal explanation of the reasoning behind Nexus Laws here. The most important paragraph is as follows:

Factor Presence

Factor presence is dictated by the amount of property, payroll, or sales a business has within a state.  Savvy readers will no doubt deduce that having a certain amount of property or payroll in a state is not the controversial part of factor presence.  After all, any amount of property or payroll in a state gives a business a physical presence, which constitutes a taxable presence for all state taxes.  The controversy with factor presence is the notion that a certain dollar amount of sales made in a state, even if there is no physical presence, creates nexus.

Despite its growing popularity, factor presence is not a new concept. The Multistate Tax Commission (“MTC”) first developed the idea of factor presence in 2002.[3]  The standard was meant to be a simple, certain and equitable standard for the collection of taxes.  In the MTC’s version of factor presence, substantial nexus is established if any of the following thresholds is exceeded during the tax period: $50,000 of property; $50,000 of payroll; or $500,000 of sales.[4] This standard allows for substantial nexus in situations where there is no physical presence as long as sales during the tax period are greater than $500,000.  In spite of questions concerning its constitutional validity, several states have incorporated these standards into their statutory nexus standards.

If you have any additional questions or concerns, please feel free to leave them in the comments section below.

Here is a list of the states affected by Nexus Laws:

Washington, Illinois, Pennsylvania, New York, California, Arizona, Tennessee, Texas, Wisconsin, Oklahoma, Ohio, New Jersey, Nevada, Georgia, Florida.

Tim Mechling
 

Tim is Mt Baker Vapor's resident creative weirdo. He writes, composes music, draws, designs, produces podcasts, investigates, and blows the trumpet for the Common Man.

  • David Timmer says:

    I live in NY and don’t see this as an inconvenience, I pay sales tax on everything else and would much rather do that than have the state outlaw flavored e juice like they wanted to do.

  • Russ says:

    I live in Pennsylvania and of all the online vapor sites I order from on a regular basis MBV is the only one that charges me this tax.

  • Jason Potter says:

    I would put Colorado on your list as well, they require you to file on your taxes for online purchases that charged no state tax. It affected me last year, causing me to get a nasty-gram about taxes due as I did not know they did this, and this year I had to dig through many many order histories.

  • frater vapor says:

    Unless something has changed, Texas collects sales tax on shipping-as-service but not on shipping costs separately itemized.

    Shipping costs NOT tied to postage costs (ie, flat rate or similar) are taxable. I’ve had to call the comptroller (after that 1987 decision) to get clarification for my own company’s tax calculations.

    See http://comptroller.texas.gov/taxinfo/sales/faq_collect.html#collect8

    Obviously, you’ll have to

  • Dale says:

    I purchase online to get better deals and to save on taxes. When something like this happens then, I look into purchasing local.
    At this point with the addition of taxes, higher shipping cost and the will of local merchants to adjust there prices to compete with online merchants, those saving have been eroded away. Only speaking of myself as I understand different market across the US are different. On my last order, I saved $2.50 compare to close to $10 a year ago. Local purchases will likely be the way to go for me in the future.
    That way I have my product to use immediately rather than waiting a week.
    Laws like this are meant to drive out of state vendors out and steer consumer to the local market, not to mention revenue for that state.
    Unless online business are willing to accept less profit to make up for the additional cost to the consumer, then I see a poor forecast for them, unless they modify their business plans.

    • John Swanke says:

      That is unfortunate. We hope to one day have more B&Ms setup so that people will be able to buy from us locally. We hope you are able to enjoy our products and services again one day.

  • LovemyBaker says:

    I am in Pennsylvania, my concern is being labeled an “Unclassified Importer” and the penalties that goes with that, such as, Pennsylvania vapers could go to prison for buying vapor products online and not paying a 40 percent tax on them. Does your “factor presence” in Pennsylvania mean you are legally a local business? Do you forward the taxes I pay you to my state. In other words, am I fulfilling all legalities and taxes locally and government wise when purchasing from you and safe from prosecutions? Thank you, because I have been with you guys for years and would like to stay.

    • Tim Mechling says:

      Here is the Pennsylvania law, as I understand it:

      A tobacco products tax is imposed on the dealer or manufacturer at the time the tobacco product is first sold to a retailer in this Commonwealth at the rate of 55¢ per ounce for the purchase of any tobacco product other than electronic cigarettes. The tax rate shall include a proportionate tax at the rate of 55¢ per ounce on all fractional parts of an ounce. The tax imposed on tobacco products other than electronic cigarettes that weigh less than 1.2 ounces per container is equal to the amount of the tax imposed on tobacco products other than electronic cigarettes that weigh 1.2 ounces. The tax shall be collected from the retailer by whomever sells the tobacco product to the retailer and remitted to the department. Any person required to collect this tax shall separately state the amount of tax on an invoice or other sales document.

      A tobacco products tax is imposed on the dealer or manufacturer at the time the electronic cigarette is first sold to a retailer in this Commonwealth at the rate of 40% on the purchase price charged to the retailer for the purchase of electronic cigarettes. The tax shall be collected for the retailer by whomever sells the electronic cigarette to the retailer and remitted to the department. Any person required to collect this tax shall separately state the amount of tax on an invoice or other sales document.

      A retailer may only purchase tobacco products from a licensed dealer. If the tax is not collected by the seller from the retailer, the tax is imposed on the retailer at the time of purchase at the same rate as in subsections and based on the retailer’s purchase price of the tobacco products. The retailer shall remit the tax to the department.

      The tax is imposed on an unclassified importer at the time of purchase at the same rate as in subsections and based on the unclassified importer’s purchase price of the tobacco products. The unclassified importer shall remit the tax to the department.

  • James S says:

    I buy virtually everything I own online just so I can avoid this tax. Aside from Amazon, if they do not have a presence in my state, I do not pay tax. Even with Amazon, I can just switch to buy from 3rd party seller and avoid the sales tax. At this point, it behooves me to buy from another online vendor or the shop down the street.

  • >