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When I buy virtual items online that do not need to be shipped, sales tax is often calculated by the merchant automatically based on my credit card billing address. My billing address is in California, but I travel a lot, so this can be annoying - I am usually paying a tax rate higher than the sales tax in the state where the purchase occurred, which is what sales tax is normally based on.

The simplest solution seems to be to register a credit card with a billing address in, say, Delaware or New Hampshire where sales tax is not charged so that I will not be charged tax at time of purchase, and can declare it at the end of the year. Is there an easy and cheap way to do this? With online billing, I don't even need to physically visit a PO box to pick up the bills, I just need an address.

To clarify, I am looking for a legal way to reduce the amount of money I pay as sales tax. Currently, I can go out and buy a coffee and pay 6% tax on that sale, then go back to my hotel room and buy an ebook or a movie that gets charged at nearly 10%. It's possible that my premise is flawed, but to a layman like myself, this felt wrong - it seems like I should be paying the tax based on the place of purchase/use - and the simplest solution that came to mind was to simplify things by calculating ALL tax when filing my annual return. I'd also prefer doing that to having to paying the higher rate up front and filing for refunds afterwards.

anonymous
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Many states require that USE tax be paid on items purchased out of state and the subsequently brought to your home state. The vendor has the responsibility to collect based upon the shipping destination. It is the buyers responsibility to declare and pay taxes on purchases where the vendor is not required to collect them for your state(like when you purchase it out of state). So if you have an item shipped out of state to avoid sales tax and then bring it to your home state then you are required to pay sales tax in your home state as well. Some states (Florida for 1) allow for the reduction in sales tax owed by the amount paid in out of state sales taxes. Some states (Like CT) exempt purchases under a certain amount.

Federation of Tax Administrators website has links to state revenue services where you can check the tax requirements for your (and other) states.

Other State Links

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Services exist that allow you to forward mail anywhere or pay bills on your behalf. A friend who travels constantly for work uses a service that receives his mail (at a street address), scans and shreds most items, and forwards packages as he requests.

Make sure that you understand what your state considers legal or illegal.

duffbeer703
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Looks like you can get a PO box online for $62 per year: https://www.usps.com/manage/get-a-po-box.htm

David Silva Smith
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Are you sure about this? I mean your premise. I thought tax was based on shipping address. I've made purchases, live, in NY, and had the choice to pay sales tax or to have the item shipped, in effect paying shipping, for real, instead of sales tax.

It appears that by buying a loaded cash card you'd accomplish your goal. I've seen such cards go fo $1.50, no fees other than that. To save the sales tax, or pay the tax of the state you're in, it may be worth it. But a NH billing address don't solve this, again, I believe tax is based on ship-to.

JoeTaxpayer
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