Stupid question
 

Hey guys. In short, I have a racing shop doing a (re) build on my car. After some planning, we figured it would be best for the shop to order everything in for me and I'd pay it all on an invoice. However, the shop is charing me over $1000 in state sales tax (not labor tax) for the parts. I'm certain none of the parts distributors are in the same state as us, which seems to be the only logical reason I'd be charged state sales tax. I've never had a shop do work for me. Is this right of them? Thanks - Vis

It depends. Sales tax is generally charged by the business selling you the items. If everything is on their invoice and they are in a state that charges sales tax, they have to charge you sales tax. Think about buying a car. If your state charges sales tax, you have to pay it regardless of where the car was actually built or sent to the dealer from.

This must be one hell of a rebuild! What is the break down of the total rebuild cost?

So you are dropping around 12grand in parts a lone into this build before sales taxs?
Because Oklahoma has a 8.68 tax in most of the state.

Remember that the Supreme Court just made a decision that online and retail companies selling to out of state now are REQUIRED to charge the sales tax of the state the purchaser is from. No more skipping out on sales tax...

When i heard about that supreme court ruling I thought thats going to bum out millions of people (Billions?) Glad it doesnt affect me

Well I guess that sums it up. Thanks for the answers. I was just a little suspicious about it. I'm in Oklahoma which obviously has sales tax. And yes, it's about 13k in parts. New motor

Most states, if not all, dont allow tax on labor...

They made the decision to allow States to enact legislation to collect Sales Tax. It will happen, but if you want to escape the "Man", you need to act soon

You might be able to get away with the sales tax if you get a list of parts, buy them online, and bring it to the shop to install. However, like BMR Sales suggested you might want to act soon before states start enacting new laws related to it. The only time the government moves quick on any kind of legislation is when they can charge more money out of people.

It's too late. Parts are already ordered. I'll just bite the bill

Fact - You were always responsible for reporting your out of state purchase and paying the sales tax yourself. Nobody ever did it though. Out of state retailers were typically not licensed to collect tax in all of the 50 states so the retailer could not collect and remit it. From a practical standpoint - no, there was no revenue officer chasing after you, but it was an act of tax evasion if you never reported and paid the tax yourself after the purchase.