online sales tax, Illinois website buyer in australia

The seller, by the way, probably does not understand these rules themselves and are not necessarily being malicious.

I am a sales tax professional, and you are getting bad advice in this thread. Illinois provides an exemption for deliveries out of state only in certain circumstances. The ROT is a gross receipts tax, and the location of the seller is far more important than the customer.86ILAC130.605(d) Nor does the tax apply to gross receipts from sales in which the seller, by carrier (when the carrier is not also the purchaser) or by mail, under the terms of his or her agreement with the purchaser, delivers the goods from a point in this State to a point outside this State not to be returned to a point within this State. The fact that the purchaser actually arranges for the common carrier or pays the carrier that effects delivery does not destroy the exemption. However, it is critical that the seller is shown as the consignor or shipper on the bill of lading. If the purchaser is shown as either the consignor or the shipper, the exemption will not apply. Further, there consumer protection laws associated with taxing a customer excess tax and with taxing customers and not remitting the tax. It is possible that the retailer is doing either of these things, but it is not common because the penalties are far more onerous than undercollecting sales tax. Without knowing the exact relationship the retailer has with their shipping carrier, we simply cannot know if you were improperly charged tax.

The law could be interpreted differently depending on how shipping is handled. If you own the product as soon as it is dropped off at Fed Ex (which is not the norm), you purchased that good in Illinois. If you do not accept ownership until you have opened your package and said it isn't defective, then you purchased that good in Australia.

thank you gjc, ...I paid for a licence, which they emailed me. and ... that is considered a taxable purchase I only mentioned that with respect to the details of the delivery, which politikitty mentioned can be relevant.

http://www.revenue.state.il.us/LegalInformation/Letter/rulings/st/2012/ST-12-0011.pdf It would seem that it is a taxable product, and the retailer is responsible to pay the ROT due. Less clear is whether the retailer is able to charge you the Use Tax to reimburse themselves. Given the sale occurred on a server in IL, I would guess they'd treat it the same as you buying something in IL. Not only am I not your tax professional, this is an area of tax which is just emerging and is in constant litigation. Technology and bureaucracy do not mix well.

You (the asker) are correct. Here is the authoritative document from the Illinois department of revenue: Dear asker--please don't listen to that answer. The only authoritative document is the actual text of the code sections. I think the cite to the code further down is where to look.

I bought software which I downloaded, however I didn't really pay for the software, which I do not own, I paid for a licence, which they emailed me. In Illinois, that is considered a taxable purchase. You own the license, with all the rights and responsibilities that comes with it. Only services are not sales-taxable here, and I'm fairly certain that doesn't count as a service. I still think the ILDOR is who you'll have to contact.

thank you politikitty Without knowing the exact relationship the retailer has with their shipping carrier, we simply cannot know if you were improperly charged tax. I bought software which I downloaded, however I didn't really pay for the software, which I do not own, I paid for a licence, which they emailed me. :)

Well, if you walk into a store in Illinois and tell them "I'm from Australia, I don't want to pay the sales tax," they are going to laugh you out of the store. But I realize online and catalog sales are, for some reason, different. I would peruse the IL Department of Revenue website. I think there is a form somewhere that you can fill out to get a refund. Or possibly a number to call. My interactions with the state of Illinois people when you call them has generally been positive. They usually want to help, and you've got a 75% shot of getting someone on the phone whose day will be made getting a call from Australia. The timezone in IL is GMT -5 right now, and they are generally open for business 8:30 - 4:30. They did get 18.5" of snow last night, so they may not be responsive for a couple of days...