Understanding Sales Tax When Shopping For Jewelry

When you decide to buy an expensive piece of jewelry, such as a diamond, you are definitely going to keep track of every single penny you spend. Unless you are using some financing option, chances are that you have spent a certain amount of time saving up the cash for this investment. So, it is only natural that you want to know what you are giving the money for and if there is a way to save some in the process.

What makes your shopping experience a bit unpleasant, though, is the infamous sales tax. Many people fail to take it into consideration when they decide to surprise someone, or themselves for that matter, with a valuable piece of jewelry. The excitement and the thrill of searching for the best diamond usually gets the better of them, so they completely forget about the sales tax. Additional info.

This is a percentage of any purchase that is added to your bill, and it is defined by law. Of course, the United States of America doesn’t have a unified system regarding this tax. In other words, the rules are different from one state to another, so you need to get properly informed. If you just assume that everything is the same in Alaska as it is in Florida, then you are in for a big surprise.

So, before making any diamond purchases, I suggest you check the law and the regulations in your own state. Furthermore, you might want to check those states where your close relatives or friends live, because you could save some bucks if it turns out that they have to pay lower taxes. Of course, that’s if you are on good terms with them and if they are actually willing to help you with this.

Can You Avoid It?

This is an inevitable part of any purchase. That is, of course, unless you find yourself an online jewelry store who can provide you with an opportunity to get relieved of this expense. Yes, you heard that right, sales tax is avoidable sometimes. So, if you are a smart shopper, you might be able to save some money while getting a diamond.

Before you open the browser and start searching for stores like these, I want to make something clear. This process is not as straightforward as you might think at first. There are still a lot of rules and regulations to apply. But, as you will see on the example of the James Allen taxation model, there is more than one way to save money by not paying the sales tax on your diamond. Let us now see how this works.

When Do You Have To Pay?

Unsurprisingly, this mostly depends on the place where you live. In addition to that, it depends on the store’s license to do business in that particular place. So, let’s say that you live in New York, and let’s take James Allen as an example again. Given that James Allen has a license in the state of New York, you will be obligated to pay the sales tax on your order.

Keep in mind that “having a license” isn’t the same as “having a physical store”. This is one of the most prevalent misconceptions, and you need to be careful not to confuse these two terms. In simple words, a specific online jewelry shop might not have a brick and mortar store in a certain state, but it can still be licensed to do business there. So, sales tax is paid wherever the business has a license.

When Can You Avoid Paying?

Given the above information, I suppose it is rather clear to you when you can avoid paying the sales tax on your diamond. Obviously – when the business has no license in your state. However, that is only one of the possible solutions.

Believe it or not, some U.S. states are free of this tax: https://www.thebalance.com/states-without-a-sales-tax-3193305

You can change the shipping address to one of the states in which this is never paid. In addition to that, shipping to a state with a lower sales tax can also be very useful. Of course, if you don’t have anyone to receive the shipment for you, it might be a bit annoying to travel, but given the money you can save, it’s worth the trouble.

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