3. STATE SALES AND USE TAX
3.05 Use Tax Concerns of Seller
Where a seller ships property into a state, the seller may be required to collect use tax from the purchaser. The Supreme Court has held that a seller cannot be required to collect use tax where the seller does not have people or property in that state.1
Some ingenious state tax authorities have attempted to convince sellers that they have an obligation to collect use tax on out-of-state sales of aircraft, particularly where the seller knows that the aircraft will be based in the state and the seller has facilities in the state. However, under the federal constitution, the states do not have the authority to impose this obligation since each sale is considered in isolation.2
- Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
- See, e.g., Montgomery Ward & Co., 272 CA2d 728 (Calif. App. 1969) [Nevada and Oregon stores not required to collect California use tax on over-the-counter sales to California residents.]