The Streamlined Sales Tax Governing Board (SSTGB) has provided general guidance regarding the sales and use tax treatment of tariffs for Streamlined Sales Tax (SST) states. The SSTGB outlines the sales tax treatment for two scenarios: When an importer resells a product, and when an importer is the consumer.
For an importer who is reselling the product, SST states consider tariff costs passed from the importer to a customer to be part of the importer’s sales price and therefore subject to the same sales and use tax as the product being sold. The SSTGB notes that this treatment is the same whether the tariff is a separate line item on the invoice/receipt or if the tariff is billed separately to the customer. If an importer does not collect sales or use tax, the customer is responsible for reporting use tax on the sales price, which includes the tariff.
In the second scenario, if a consumer imports a product and is responsible for paying the tariff to the customs authority, the tariff paid by the consumer (importer) is not subject to sales or use tax. The consumer (importer) is responsible for the applicable use tax on the product sales price, which is not inclusive of the tariff paid by the consumer (importer) to the customs authority.
The SSTGB notes that this is general guidance and encourages taxpayers with state-specific questions to contact the state. (Tariffs – Sales Tax Treatment, Streamlined Sales Tax Governing Board website)