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"No, they have to report the location of the transaction, for which there are legal rules, which specify that the location of the transaction for sales tax is “

"No, they have to report the location of the transaction, for which there are legal rules, which specify that the location of the transaction for sales tax is “where the merchandise is physically located at the time the sale takes place.”" And if the merchandise is located in China at the time the sale takes place? What city do they pick then?

dragonwriter 3y ago
> And if the merchandise is located in China at the time the sale takes place? Then the consumer owes use tax and the seller doesn’t owe sales tax, because its a sale from outside of California. This is also specified in the state tax information document posted upthread. But Apple isn’t paying sales taxes in Cupertino for sales it isn’t required to pay any sales tax on in the first place. For the most part they deliver from their many California warehouses (and even retail stores), not China, for in-state orders.
- sharedbeans 3y ago
  Do you think California would accept a company like Apple not collecting the sales tax because the merchandise came from China? Any company doing online sales would just need to locate the merchandise across state lines.
  - dragonwriter 3y ago
    > Do you think California would accept a company like Apple not collecting the sales tax because the merchandise came from China? California sales tax collecting authority spells out in black and white that they are not to collect sales tax in that case, so I’m going to say “Yes”. (OTOH, they do have to collect the equivalent use tax, based on the location where the goods are delivered if they are, because of their other business circumstances – as Apple is – required to register with CDTFA and collect and remit use tax on behalf of customers. But, again, that’s both technically separate from sales tax and, more to the point, has a very specifically specified location which, again, Apple would not be legally free just to move to their HQ or some other location.)
    - sharedbeans 3y ago
      Ok I think I see that they would be required to collect use tax in this case, it would not be the customer remitting it.
    - jll29 3y ago
      Apple uses another legal entity, Cork, Ireland-based Apple Sales International (ASI) that asks Foxconn to produce a purchased device and to ship it directly to the country where it was ordered. This is part of a game called ¨transfer pricing¨, an OECD-approved legal procedure for multinational corporations to lower their overall average effective tax rate by creating a trans-jurisdiction network of company entities with patent/trademark cross-licensing contracts: https://taxjustice.net/faq/what-is-transfer-pricing/#:~:text=Transfer%20pricing%20is%20a%20technique,at%20an%20artificially%20high%20price https://taxjustice.net/faq/what-is-transfer-pricing/#:~:text.... https://curia.europa.eu/juris/document/document.jsf?text=&docid=228621&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=9589342 https://curia.europa.eu/juris/document/document.jsf?text=&do... https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute https://scholar.google.de/scholar?as_ylo=2019&q=oecd+transfer+pricing&hl=en&as_sdt=0,5 https://scholar.google.de/scholar?as_ylo=2019&q=oecd+transfe... It is not just Apple. For example, this permits SIEMENS AG to claim they are headquartered in the low-tax village of Zug, Switzerland for tax purposes, despite the company´s Web pages state the giant has its HQ in Neuperlach Sued, part of Munich, Germany. Governments lose billions in taxes every year from transfer pricing.

dragonwriter 3y ago

> And if the merchandise is located in China at the time the sale takes place? Then the consumer owes use tax and the seller doesn’t owe sales tax, because its a sale from outside of California. This is also specified in the state tax information document posted upthread. But Apple isn’t paying sales taxes in Cupertino for sales it isn’t required to pay any sales tax on in the first place. For the most part they deliver from their many California warehouses (and even retail stores), not China, for in-state orders.

sharedbeans 3y ago
Do you think California would accept a company like Apple not collecting the sales tax because the merchandise came from China? Any company doing online sales would just need to locate the merchandise across state lines.
- dragonwriter 3y ago
  > Do you think California would accept a company like Apple not collecting the sales tax because the merchandise came from China? California sales tax collecting authority spells out in black and white that they are not to collect sales tax in that case, so I’m going to say “Yes”. (OTOH, they do have to collect the equivalent use tax, based on the location where the goods are delivered if they are, because of their other business circumstances – as Apple is – required to register with CDTFA and collect and remit use tax on behalf of customers. But, again, that’s both technically separate from sales tax and, more to the point, has a very specifically specified location which, again, Apple would not be legally free just to move to their HQ or some other location.)
  - sharedbeans 3y ago
    Ok I think I see that they would be required to collect use tax in this case, it would not be the customer remitting it.
  - jll29 3y ago
    Apple uses another legal entity, Cork, Ireland-based Apple Sales International (ASI) that asks Foxconn to produce a purchased device and to ship it directly to the country where it was ordered. This is part of a game called ¨transfer pricing¨, an OECD-approved legal procedure for multinational corporations to lower their overall average effective tax rate by creating a trans-jurisdiction network of company entities with patent/trademark cross-licensing contracts: https://taxjustice.net/faq/what-is-transfer-pricing/#:~:text=Transfer%20pricing%20is%20a%20technique,at%20an%20artificially%20high%20price https://taxjustice.net/faq/what-is-transfer-pricing/#:~:text.... https://curia.europa.eu/juris/document/document.jsf?text=&docid=228621&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=9589342 https://curia.europa.eu/juris/document/document.jsf?text=&do... https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute https://scholar.google.de/scholar?as_ylo=2019&q=oecd+transfer+pricing&hl=en&as_sdt=0,5 https://scholar.google.de/scholar?as_ylo=2019&q=oecd+transfe... It is not just Apple. For example, this permits SIEMENS AG to claim they are headquartered in the low-tax village of Zug, Switzerland for tax purposes, despite the company´s Web pages state the giant has its HQ in Neuperlach Sued, part of Munich, Germany. Governments lose billions in taxes every year from transfer pricing.