How to Get the Sales Tax to Zero on TikTok Shop? Tiktok Shop is an online marketplace that offers great deals on a variety of products. One of the best things about shopping on TikTok Shop is that they offer free shipping on all orders. However, Tiktok Shop does charge sales tax on purchases in most states. This can add a significant amount to your order total.
Thankfully, there are several strategies you can employ to reduce the sales tax to nothing when shopping on TikTok Shop. This piece will delve into the various tactics that can be used to elude paying sales tax on TikTok Shop.
Confirm Whether Your State Imposes Sales Tax
Contents
The initial step is to ascertain whether your state imposes a sales tax on online purchases. Five states – Alaska, Delaware, Montana, New Hampshire, and Oregon – do not require online retailers like TikTok Shop to accumulate sales tax. If you reside in one of these five states, you are not obligated to pay any sales tax when ordering from TikTok Shop. Consequently, you can take full advantage of the free shipping and other impressive discounts without being concerned about sales tax.
As for the remaining 45 states (including Washington D.C.), sales tax is applied to purchases made on TikTok Shop. The rates vary from 2.9% in Colorado to 7.25% in California, with some states offering lower rates for clothing and essential items. Knowing the sales tax rate for online transactions within your specific state is vital before ordering from TikTok Shop. This knowledge will help you predict how much additional cost you will incur.
Apply Discount Vouchers and Earn Money Back to Balance Out Sales Tax
Several methods exist to mitigate the additional expense if you reside in a state that imposes a sales tax on online transactions. TikTok Shop frequently provides discount codes and cash-back opportunities that you can utilize. Prior to making a purchase, search online for the latest TikTok Shop promo codes and discounts. Websites such as RetailMeNot compile the most recent offers.
It’s common to discover discount codes that offer 10-15% off your TikTok Shop order. However, some exclusions may apply, so be sure to read the fine print. A discount code can significantly reduce the final amount you must pay.
Cash-back platforms like Rakuten also provide cash-back opportunities at TikTok Shop. Activate the cash-back offer before you start shopping, and you can earn a percentage of your purchase amount back. This cash-back bonus can be used to counterbalance the amount of sales tax.
Combining discount codes and cashback is an excellent strategy to lower your final total, effectively reducing the sales tax. Always make sure to understand the terms to apply codes accurately and thoroughly.
Use Tax-Exempt Status
If you have a tax-exempt business or organization, you can use that status to avoid paying sales tax on TikTok Shop. When checking out, there is an option to input your tax-exempt number. You will have to submit proper documentation to verify your tax-exempt status.
Once approved, TikTok Shop will exempt your future purchases from sales tax. This can lead to big savings, especially on large orders. Remember that your tax exemption must be used for legitimate business purposes, not personal shopping. Improper use of a tax ID can result in penalties.
Shop on Desktop to Avoid Sales Tax
Here’s a neat trick to circumvent sales tax on purchases made on TikTok Shop – use the desktop website rather than the mobile app. While shopping on the TikTok Shop mobile app, your location services are utilized to ascertain your current state and compute the corresponding sales tax.
Conversely, shopping through the desktop website might not impose a sales tax if your billing address differs from your shipping address. For instance, if your residence is in Texas but uses a billing address in Oregon, you can evade paying the Texas sales tax.
To exploit this discrepancy, establish a billing address in a state with no sales tax, like Alaska or New Hampshire. Strictly use the desktop website for shopping and select your non-residential billing address during checkout. This method can effectively reduce your sales tax to zero.
Use a Freight Forwarding Service
Freight forwarding services present a viable avenue for legally avoiding sales tax. These services offer you a shipping address in states such as Oregon, Delaware, or New Hampshire, where sales tax is non-existent. You can direct your TikTok Shop order to the freight forwarder’s address, effectively bypassing sales tax expenditure.
Upon the package’s arrival at their facility, they will forward it to your address. Note that this process incurs a minor forwarding fee, though it pales compared to the sales tax amount. Numerous freight forwarders, such as Stackry, Shipito, and MyUS, are available.
We recommend conducting a comparison shop to secure the most cost-effective deal overall. With a freight forwarder, you can achieve significant savings on sales tax from online retailers like TikTok Shop. Remember to include the forwarding fees when determining your total savings.
Work with an Online Tax Expert
Sorting through the complex labyrinth of sales tax regulations and exceptions can be daunting if you do it alone. If you’re looking to mitigate sales tax on your TikTok Shop purchases legally but don’t know where to begin, consider seeking assistance from an online tax professional.
Services like Avalara’s TaxRates offer access to a team of CPAs, attorneys, and accounting experts specializing in sales tax laws. For a nominal monthly fee, they can offer bespoke advice on how to trim your sales tax burden from online buying legally.
These experts remain on the cutting edge of all the latest sales tax rules and exceptions, enabling them to provide specific strategies based on your geographical location and personal circumstances. Their knowledge can be invaluable in optimizing your savings on purchases from TikTok Shop and other online retailers.
Final Words
Paying sales tax on your TikTok Shop purchases can rack up quickly, particularly for larger orders. Fortunately, several legal ways can reduce this sales tax to zero if you know the right channels. Utilize coupons, cash-back deals, tax-exempt status, and freight forwarding to lawfully waive the sales tax on your future TikTok Shop orders.
Alternatively, seek advice from an online tax consultant to create a bespoke sales tax reduction plan. Using the appropriate strategies, you can save substantially on TikTok Shop’s impressive deals.