Me and my friends were chatting in dinner in California. Some were complaining about the high sales tax rate in our state. One suggested that if any of us had an Oregon address, we could have our stuff shipped there, then shipped to our residences so that we could take advantage of Oregon's 0% sales tax. We were split on the legality of this idea: some argued that it is a textbook example of tax evasion while others claimed that this does not raise any legal issues. Which side is right here?
You need to pay tax on it. From CA FAQ on use tax. -
Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state.
For these purchases, the buyer is required to pay use tax separately.
I see comments about bags of chips bought on a trip off of state. If the dollars are big enough this gets enforced,
Ex-Tyco Chief Is Indicted In Tax Case
By Alex Berenson and Carol Vogel
June 5, 2002
L. Dennis Kozlowski, former chairman and chief executive of Tyco International, was indicted yesterday by a grand jury in Manhattan on charges of evading more than $1 million of sales taxes on six paintings that he bought last fall.
Mr. Kozlowski bought the paintings, which included a Renoir and a Monet, for $13.1 million for his 13-room apartment at 950 Fifth Avenue. To avoid paying New York sales taxes, prosecutors said, he shipped empty crates to Tyco's headquarters in Exeter, N.H., and transported paintings back and forth from New Hampshire to Manhattan.
He went to jail.