Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $1,500 dress that is shipped to her Maryland residence using a common carrier. Roxy's total Maryland sales are $20,000 on 15 transactions. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 7 percent, what is Roxy's sales and use tax liability?

Question

Quizplus · Accepted Answer

Since the dress was shipped to Maryland, the sale is considered to occur in Maryland, not Virginia. Roxy does not have a physical presence or nexus in Maryland, so she is not liable for Maryland sales tax. Therefore, Roxy's sales and use tax liability is $0.

Roxy Operates a Dress Shop in Arlington, Virginia