Question

Steve is passionate about rare orchids but can’t find them in Minnesota, so he orders his supplies online from an orchid supplier with headquarters in California. The supplier has all of its facilities in California and collects payment in California. Does Steve have to pay either Minnesota or California state sales tax on the orchids? One year later, the supplier opens a warehouse in Minnesota to handle its online orders for the entire country. Is Steve now required to pay Minnesota states tax? Provide a 1-page double spaced response with source/reference where information was taken from.

please type up to one paged. required.

Answer 1

Ans. When Steve orders his supplies online from an orchid supplier with headquarters in California. The supplier has all of its facilities in California and collects payment in California. In this situation, Steve has to pay either Minnesota or California state sales tax on the orchids. This is because Steve is buying something from one state to other so inter-state sales tax will be applicable to the final product.

Now when one year later, the supplier opens a warehouse in Minnesota to handle its online orders for the entire country. Then Steve is required to pay Minnesota states tax because now he is buying goods directly from his home state's warehouse and goods are not moving within states. So he as to pay only Minnesota sales tax only.