If you live in PA and run down to Delaware to buy your diamonds from Robins Delaware Diamonds (no longer Ronbins Eighth & Walnut), you are a tax cheat.
If you buy online and aren’t charged sales tax for PA, you’re a tax cheat.
Yup, that’s right the Pennsylvania government wants you the average Joe to man up and pay your sales tax no matter where you buy your goods.
I first learned about this little sales tax issue when doing my taxes through Turbo Tax. The program will ask you for your unpaid state sales tax. I never knew this until this time. Today while looking up information on a taxable item for work (gift certificates are not taxable by the way) I landed on this page over at the PA Dept of Revenue‘s site: Use Tax for Individuals. Go ahead and pop over there and give it a read why don’t you.
Here is the basic info if you don’t want to rush to a government site (and I don’t blame you — big brother and all that)…
When sales tax is not charged by the seller on a taxable item or service, the consumer is required by law to report and remit use tax to the Department of Revenue. Purchases made over the Internet, through toll-free numbers, from mail-order catalogs and from out-of-state locations are examples of purchases subject to use tax when sales tax is not paid. The tax rate is the same as the sales tax, 6 percent state, plus 1 percent local tax for items purchased in, delivered to or used in Allegheny County or 2 percent local tax in Philadelphia.
Their site lists some very interesting examples of when and where you have to pay Use Tax (which is when you don’t pay sales tax on something you are using in PA). Here’s my example.
You pop down to Robins Delaware Diamonds because the radio told you they have TAX FREE shopping and buy your girl a diamond ring. She is living in and wearing that ring in PA. Guess what? You still owe the 6% sales tax to Pennsylvania as Use Tax. So there goes all your gas money for driving down to DE to get a ring and bring it back to PA.
You might ask, how in the world will PA ever know I bought my ring at Robins Delaware Diamonds? They may never know, but you will know that you were dishonest and owe the state some money. For me I just wish they would stop advertising on Philadelphia radio stations about going to Delaware to buy from them simply because it is tax free when in fact it is not (see above government resource).