Tariffs - Sales Tax Treatment
The US Government has recently imposed new or higher tariffs on goods from all countries. Tariffs are a common international trade practice. Importers and customers need to know if a state sales or use tax applies to the tariff imposed on the product they sell or purchase.
Tariffs are imposed on the importer when goods are imported. Many importers include tariffs in the amount charged for the product. With the recent tariff changes, some importers may pass the tariff on to their customers as a separate line item on the invoice or receipt.
Importer Resells Product
Streamlined states consider tariff costs passed from an importer to a customer as part of the importer's sales price and subject to the same sales and use tax as the product being sold. It does not matter if the tariff is line itemed on the invoice or receipt or billed separately to the customer. If the importer does not collect sales or use tax, the customer is responsible for reporting use tax on the sales price, which includes the tariff the importer billed.
Importer is the Consumer
If a consumer imports a product and is responsible for paying the tariff to the customs authority, the tariff paid by the importer (the consumer) to the customs authority is not subject to sales or use tax. The consumer is responsible for the applicable use tax on the product sales price, which does not include the tariff the consumer paid to the customs authority.
This is general guidance to help you understand your sales tax collection and reporting responsibilities. If you have additional state specific questions, please contact that state.