Quote:
Originally Posted by jayshum
I would think that the use tax would only be due on purchases you made while a resident of the state so anything you owned prior to moving to a new state with a use tax would not be subject to the use tax.
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And that is why I specifically mentioned the purchase of the new living room set just before you move, and presumably just after you purchased the house in the new state. To show differences in the circumstances and how there isn't always a simple, straightforward answer to a question like this.
Here's another way to look at this though. Say you have a house and live in a state with a sales tax, but also own a second home (vacation home) in a state without sales tax. And all the furnishings and belongings in the vacation home were purchased in that state so no sales taxes were paid on any of the belongings and furnishings in it. And then after years of owning the vacation home you had to sell it, and end up moving all the furnishings and belongings in it back to your main home in a state with sales and use taxes. Do you now owe use tax on everything you brought back to your main home and state you officially reside in, even if items you brought back were originally purchased years, or even decades, ago? See how this can get confusing?
I bring up the concept of a time threshhold because though most states don't generally have any actually written into their sales and use tax laws, there are specific instances where such a time threshhold can exist in some circumstances. Say in my example the main house was in California and the vacation home in Oregon, which is where PWCC and their vault is, with no sales taxes. And in addition to all the belongings and furnishings in the vacation home being purchased in Oregon without sales taxes, the owner had purchased a car that is licensed, registered and been kept at the Oregon property also. So no sales tax was paid on it either. And again, for whatever reason, the Oregon vacation home is sold and everything is moved back to the main residence in California, including the car. Now California sales tax laws say nothing specific in this case about potential use tax owed on the furnishings and other belongings, but they do have very specific rules regarding the car. In this case, if the car had been originally purchased in Oregon less than one year ago before now moving it to California, the owner owes sales tax to California in the amount of whatever the sales tax would have been had the owner originally purchased the car in Calfornia, less the actual sales tax originally paid when the car was actually purchased in Oregon. And in this case since Oregon has no sales tax, California is owed sales tax on the original sales price, in full. However, if the car had been purchased one year or more before moving it from Oregon to California, then under California law the car is now exempt from sales and use taxes entirely, and the car owner owes $0 to California for sales/use tax.
And this is what I mean about a possible implied time threshhold for the exemption from use tax for property being brought into a state. In this case, if California is going to exempt sales/use tax charged on a car purchased more than a year before moving it to CA, you would assume and expect that they would at least give the same time period threshhold for exemption from sales/use tax for all other property being brought into the state, such as furnishings and other belongings. But since nothing is specifically written in CA sales and use law like this exemption for property other than vehicles, I would advise checking with a tax professional familiar with CA sales and use tax laws, and even contacting the appropriate CA taxing authority to see if they can provide further guidance on a potential time threshhold for use tax exeption of other property being brought into the state.
Now this example and rule regarding cars is specically just for California. You would want to look into and review the sales and use tax laws in whatever state you would be moving property to, to see if you can find similar instances like CA where they specify a time threshhold for a use tax exemption, and likewise contact a tax professional knowledgeable in that particular state, as well as actually contacting the appropriate state taxing authority for additional insight and to see what they can tell you about possible time threshholds for use tax exemption.
So at the end of the day, items you put into a sales tax-free vault may be removable at some point without triggering use tax. But, you need to research it and look into the sales and use tax laws of the applicable state(s) involved.
Clear as mud, right? Welcome to the world of taxes, and in this case specifically state sales tax law.