Sales Tax on International Orders?

[habu2]

I just received notice from Hobby Search ( 1999.co.jp ) that the quoted price for my order had been increased because they are now required to collect sales tax for my state (Texas, 8.25%).  I know interstate sales online must collect endpoint sales tax, but this is the first time I've been charged sales tax on an international order.  How can a state enforce tax collection internationally?  Has anyone else experienced this? 

 

Note this increase was specifically identified as a state sales tax, not an import tariff. Let's not go there again. 

 

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Edited April 1, 2025 by habu2

[Model-Junkie]

Crap, I never paid attention to them collecting sales tax.  Apparently this has been happening since late 2022: https://www.1999.co.jp/tax_collection_e.html

Edited April 1, 2025 by Model-Junkie

[andyf117]

The above link appears to date from 2022, and the list of states doesn't include Texas - so I'd suggest it's probably only just been added...

[habu2]

I have recently (this year) ordered from Lucky Model and Plaza Japan and neither has added sales tax, so it must be a very recent change. ☹️

[habu2]

3 hours ago, Model-Junkie said:

Crap, I never paid attention to them collecting sales tax.  Apparently this has been happening since late 2022: https://www.1999.co.jp/tax_collection_e.html

 

Your link contains an embedded link with much more detail.

 

https://www.avalara.com/us/en/learn/guides/state-by-state-guide-economic-nexus-laws.html

 

For example, here are the requirements imposed by the state of Texas.  I find it hard to believe Hobby Search sells in excess of USD $500,000 a year in Texas ...

 

Texas economic nexus threshold: $500,000 in sales only

 

Included transactions:

• Gross revenue from sales of tangible personal property and services into the state
• Exempt sales
• Exempt services

• Sales made through a registered marketplace facilitator

Excluded transactions:

• None

Effective date:

July 1, 2019

 

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Edited April 1, 2025 by habu2

[Model-Junkie]

A bit more Google search yielded this result: https://www.1999.co.jp/eng/infodetails  Looks like they are collecting the TX sales tax early as it was due to go into effect on April 7th. 

 

I'm not sure if they updated their website over night, but the link I originally posted shows the two newly impacted States (Texas and Colorado) in the list. 

 

I usually only buy from Hobby Search when they run a sales promotion but that may now change.  I make my main purchases from HLJ or AmiAmi, the former has a private warehouse for your purchases and both usually have lower prices for the model kits I'm interested in.

[sigtau]

I live in Washington state and we've had to deal with this sale tax thing for about 10 years.  While I understand that US based companies have no choice but to follow the law, I would be very suspect of a foreign company collecting state sales tax.  I wouldn't count on those tax payments actually making it to the state coffers.  

 

If a transaction is through Ebay, then the money is probably going to make it to where it needs to go since they were forced to collect it for sellers several years back.

 

As a side note, I had an EU based model company try to charge me EU VAT.  It took a bunch of back and forth messages before they admitted it was more work for them to not collect the VAT, so they just collect it on all sales, even those outside the EU.  This makes me very suspect with tax collection and online ordering.

[andyf117]

53 minutes ago, Model-Junkie said:

A bit more Google search yielded this result: https://www.1999.co.jp/eng/infodetails  Looks like they are collecting the TX sales tax early as it was due to go into effect on April 7th. 

 

I'm not sure if they updated their website over night, but the link I originally posted shows the two newly impacted States (Texas and Colorado) in the list.

When I viewed it earlier it listed 17 states, and now it's showing 19, so yes, it has been updated...

....and as for "collecting early", they may be taking shipping time into account - expecting the items to arrive after April 7th...

 

 

[habu2]

While not happy about having to pay state sales tax on an international sale, I must admit some sympathy for these sellers.  For example in Texas there is a state sales tax, a county sales tax, and a municipal (city) sales tax. The state tax rate is 6.25% and the county and municipal rates are set locally and can range from 0.0% to 2.0%. There are 254 counties in Texas, and certainly more municipalities than counties. But, to simplify, assume just one city in each county in the state. That makes 508 different tax rate possibilities that a vendor must go through to assess proper tax rates. And that's just one state out of 50.  All this figuring foreign tax rates, tracking and filing collected taxes etc. is overhead labor for the vendor, and I doubt they do it for free. Bottom line, the imposition of foreign tax collection raises the cost of the hobby to the modeler by more than just the sales tax. 

[Alternative 4]

Charging sales tax on international orders is immoral, just government's being greedy. I could possibly understand the shipping portion, as that at least involves local services, but the whole order is wrong. Who even polices that the shop forwards that tax on to local authorities anyway?

[Model-Junkie]

So I got suckered into buying from Hobby Search (HS) again, they have a sale going on right now.  I get charged 6% MD sales tax but to offset the tax HS discounted my shipping costs by 20%.  As mentioned above, not sure if Hobby Search is sending the taxes collected to the U.S. and appropriate States.  Other Japanese retailers are not collecting tax from U.S. buyers.

 

I am fine with paying taxes for the area I am spending my money in, any time you travel you pay taxes on goods or services local to the area you are in.  For example I travelled to England and Hong Kong in February and March this year, I paid any applicable sales tax I when I bought things whilst in those two Countries.  I do not agree with my State trying to collect taxes from any of my money I spend elsewhere.

[habu2]

Given the market events of the past couple of days, it looks like the added expense of sales tax may be a drop in the bucket when compared to the US Dollar going into free fall. The exchange rates will result in paying more for hobby kits and supplies from foreign sellers. 

[Dutch]

I was on an international buying spree for the last few months trying to replace some of my flood losses while the USD exchange rate was very good vis-a-vis other currencies.  However, I have reigned it in since the Trump tariff announcements and the fall of the dollar last month.  International vendors collecting US state taxes!?  I guess I'll stop buying and start building.  I need to build a man/woman cave where I can build models and the missus can paint together.  I'll let y'all know if/how I manage it. 

[habu2]

I'm in the middle of building a man-cave, added a second story to the garage.  I had it framed, sided & roofed, and I'm doing all the electrical, insulation, drywall & flooring.  Costing me a lot more than my modeling hobby....

[Scott Smith]

I just ordered an RC airplane engine from Australia.  No sales tax was added.  

[habu2]

https://support.hlj.com/hc/en-us/articles/45909734687257-Suspension-of-Selected-US-Shipping-Methods

 

Important Notice: Tariffs & US Shipping

Dear Customer, We are writing to let you know about a planned suspension of several US shipping methods, in light of the recent changes to US shipping regulations. Due to recent changes in international shipping regulations for the United States including the recently announced tariffs, we will temporarily stop offering several shipping methods to the US. This includes services from FedEx, DHL, and some Japan Post options (Surface and Airmail), as well as our HLJ Quick Pack and HLJ Small Pack services. Only EMS shipping will remain available for shipments to the US. These changes will start on Monday, April 21 at 12:00 p.m. (JST) / Sunday, April 20 at 11:00 p.m. (EST). If you wish to use any of the affected shipping methods, please submit your shipment request before this time. These services will still be available for other countries. The EMS Shipping method offered by Japan Post will continue to be offered to the US. We will also offer EMS shipping at discounted rate starting from the 21st of April at 12:00 JST until May 9th. We highly recommend our US customers utilize this shipping method to ship during this period of suspension. Please find additional details on our website notice linked below. We greatly appreciate your continued support during this time, Kind regards, HLJ Team

Edited April 18, 2025 by habu2

[AircraftAddict]

On 4/4/2025 at 12:40 AM, Model-Junkie said:

So I got suckered into buying from Hobby Search (HS) again, they have a sale going on right now.  I get charged 6% MD sales tax but to offset the tax HS discounted my shipping costs by 20%.  As mentioned above, not sure if Hobby Search is sending the taxes collected to the U.S. and appropriate States.  Other Japanese retailers are not collecting tax from U.S. buyers.

 

I am fine with paying taxes for the area I am spending my money in, any time you travel you pay taxes on goods or services local to the area you are in.  For example I travelled to England and Hong Kong in February and March this year, I paid any applicable sales tax I when I bought things whilst in those two Countries.  I do not agree with my State trying to collect taxes from any of my money I spend elsewhere.

I get where you're coming from. It’s frustrating when tax collection feels inconsistent between retailers. Some Japanese stores charge it, others don’t no idea if it even makes it back to the states. I don’t mind paying local taxes either, but the whole system feels messy for international orders. At least HS gave you a shipping discount to soften the blow!

Kinda reminds me of a trip to Hanoi through this guide  https://gowithguide.com/vietnam/ha-noi/guides they helped me understand which purchases had VAT included and which didn’t. It was nice having clarity, unlike this guessing game with overseas retailers. 

[habu2]

Same here. Since my experience with Hobby Search charging tax on my order, I have place two orders with Plaza Japan without any additional "tax" charges. I will also add that, even by selecting the cheapest shipping option PJ offered, I have already received BOTH PJ orders while still waiting for my HS order. Also the kit I ordered from HS became available at Sprue Brothers only a week after I placed my HS order. Next time I will try to be more patient and wait for a local option before ordering from HS.