Not everybody is interested in PurseBlog, but as a state revenue department, it pays to heed what the market is saying. The members of this blog on high-fashion apparel and accessories are highly educated about making online purchases from out of state for the sole purpose of avoiding the sales tax. On the PurseForum, fashionistas share their expertise with each other which retail locations, sales associates, and ship-to states enable them to not pay sales tax. Shoppers use the tactic of browsing the item of interest at their local brick-and-mortar store, then proceed to purchase the item online, a technique known as “showrooming”. After reviewing online discussions found on PurseBlog, the states that come out on top as the perceived “online shopping tax haven” is quite surprising.
The top 5 states in order are: West Virginia, Kentucky, Michigan, Illinois, and Wisconsin. The main strategy is to find a boutique or retailer which does not have a physical store based in the buyer’s home state. The most convenient method to avoid the taxes was to ship to a neighboring state, which makes West Virginia the winner. Five different PurseBlog users are documented mentioning shipping to West Virginia based on the boutique located in Virginia. Second prize goes to Kentucky, with 3 mentions of purchases shipped there:
- 7 of 17 purchases were made with the buyer’s state different from the state to which the item was shipped, indicating the “ship to an out of state friend” strategy is being used
- 10 of 17 purchases were made with the item shipped to the buyer’s state: a clear case where Use Tax must be collected
- Honorable mention go to New Jersey, Arizona, Texas, South Carolina, North Dakota, Minnesota, and Connecticut
Click here to download the findings in Purseblog Stats for Sales Tax.