I have a question about reporting out of state sales tax

[cashmoney9]

I bought a dvd online it was shipped from Connecticut they didn’t charge sales tax on the dvd when I bought it and I live in Alabama. How do I report it on my taxes? What line do I have report it on? I’m using TurboTax deluxe cd edition And I’m using windows 10. I emailed them they said I only have to report the subtotal of the dvd. Is that correct?

[DianeW777]

Yes, you report the total amount you had to pay for the DVD as the total sales from other states where sales tax was not paid. This total amount does include shipping as a rule. Almost all states ask this question on the tax return now, so that they can collect any sales tax that was not charged to residents from out-of-state purchases. There are some states have taxes other than sales tax or sales tax on specific items.

When you continue through your Alabama (AL) tax return you will reach a screen title 'Out-of-State Purchases' and this is where you must answer 'Yes' and the AL interview will walk you through the rest of that section to enter your dollars spent without paying a sales tax. See the image below.

[Kat]

@cashmoney9 This type of sales tax is typically called a Consumer User Tax or something similar.  It would only be reported for your individual state.  Some states have a separate tax return entirely just for this type of tax.

I've looked and looked at the AL Department of Revenue website, including AL Form 40 for 2021, and do not see a line-item for entering this type of tax.  I also cannot find a specific tax return for reporting Consumer Use Taxes due.

I found this article from 2007 stating that there would be a line-item option to enter on the AL Form 40:

Alabama Department of Revenue

What I'd suggest is when going through your TurboTax interview for the state of AL, you may be asked if you purchased items in 2021 for which you paid no sales tax.  You may be asked to enter the price you paid for the DVD you've mentioned.  The sales tax rate for this item would be 4%, based on what I've seen.  The program will either calculate the tax due for you, or you can enter the amount that would equal 4% of the price you paid.

Please let me know if you are asked to enter this anywhere during your TT interview.  I'm curious.  If you purchased only the one DVD, I wouldn't worry too much about the tax due on this item.

[Kat]

@DianeW777 Girl, you came up with the answer (beautiful!) for this user while I was trudging through the AL DOR website!  Great job!  It took me forever to come up with NOTHING!   😉