2006Legal / Business Practices forum
Import duties and sales tax obligations on international purchases
20 years old. Gear and prices may have changed since.
What the thread found
- Import duties on goods shipped internationally can be substantial and should be factored into the purchase price rather than avoided through deception
- Contacting the customs official assessing duties politely and respectfully may result in a reduction of the assessed amount
- California residents are required to pay use tax on out-of-state and international purchases, which should be reported on state tax returns
- Business owners in California can choose between two approaches for rental property taxation: charging sales tax on rentals while avoiding property tax on equipment, or paying property tax on equipment while not charging sales tax on rentals
- Failing to properly report and pay use tax on international purchases can result in back tax bills with penalties and additional fines
Depends on
- Discussion focuses primarily on California tax law and may not apply to other jurisdictions
- Some advice about labeling packages as gifts to avoid duties was mentioned but acknowledged to have practical limitations and potential consequences for insurance coverage
- The specific tax rates and regulations mentioned are from 2006 and may have changed
- Participants note that tax law is complex and changes frequently, requiring consultation with qualified accountants