Visitor Shopping in the US: Would I get tax refund? Would I have to pay anything upon departure?
I plan to do some shopping when I'm in the US. I wanna know two things:
What items will I get tax refund on? and in which states/cities?
Will I have to pay anything at customs when I am leaving the US? i.e on un-opened items like gifts to my friends and family?
Details:
I'll be on a J-1 visa
I'll be around in states/cities at the east coast + the capital.
Goods I am likely to buy for myself or as a gift: Clothes, Shoes, Makeup ...
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Yes, you get a refund but only in a couple of states. If you are visiting Louisiana (e.g. New Orleans), there is sales tax refund on tangible items purchased at tax-free stores and permanently removed from the United States (http://www.louisianataxfree.com) . Clothes, shoes, makeup.. these are all items you can claim a tax refund for. Alas, I believe only Louisiana and Texas (http://taxfreetexas.com/) have this, it might be good to know if you are going there. In some states (Alaska, Delaware, Montana, New Hampshire and Oregon I believe) there is no sales tax at all.
You do not pay anything at customs for gifts purchased when you leave the United States.
Tax Refund: The US generally does not refund tax like other countries. For larger sales, you might want to try state tax refunds, check here: help.cbp.gov/app/answers/detail/a_id/373/~/how-to-obtain-a-refund-of-sales-tax-paid-while-visiting-the-united-states
US Customs: You never pay US customs when you leave, they don't care about what you take out of the country. You might have to pay customs in your arrival country afterwards, and the rules depend on the country you arrive in. Most countries have a limit on how much you can bring for free, typically in the range of 500 $, but that varies a lot. Also, some countries do not count used articles, so if you wear your new clothing once, it does not count against the limit anymore.
Sales tax and luxury tax is what you will have to pay tax wise, and they are non-refundable (in most cases but the rules vary area to area).
This really tripped up some friends of mine I had come from England. The rules are complicated and regional.
Sales tax is anywhere from 0% to 10.25% and are not usually applied to raw foods.
Luxury taxes are usually state level and only apply to things most people consider a large purchase. Jewelry, cars, houses, etc. Not things your likely to buy. (Small, "normal" jewelry usually doesn't count. Diamond covered flava-flav clock ... probably has a luxury tax.)
For sales tax, it can change a lot. Don't be afraid to ask. People ask all the time. It's normal. I personally add 10% to what I buy. Sales tax in my city is 7%, county is 6.5%, state is 6%. So you can get different rates depending on what side of the street you shop on some times.
Under normal circumstances you do not get a refund on these taxes. Some states do give refunds. Usually however the trouble of getting that refund isn't worth it unless making a large purchase.
You are not exempt from paying sales tax. (Depending on where you go you may get asked). Business are exempt if they are purchasing things to re-sell. Only the end customer pays sales tax.
Depending on where you go, online purchases may not be subject to sales tax. Though they might. That, again, depends on city, county, and state laws.
Normally, you will have to pay sales tax at the register. It will be calculated into your total, and show as a line item on your receipt.
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Also some products have other non-refundable taxes. Rental car taxes, fuel taxes and road taxes are all likely taxes you will have to pay.
Areas that have a lot of tourists, usually (but not always) have more of these kinds of taxes.
Friendly note. DON'T BUY DVDs HERE! They won't work when you get home. I know you didn't ask but this catches a lot of people. Same for electronics (in many cases, specially optical drives and wireless).
The US doesn't have a Value Added Tax, which is the one usually refundable upon departing the country... so sales taxes you pay in this country stay in this country and you don't get a refund. Just remember to treat the tax as an implied part of the price. (And be aware that state and local taxes may vary, so the total price may be higher in one place than in another. New York City adds a few percent on top of the state sales tax, for example.) If you aren't sure how much tax would be, don't be afraid to ask.
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