Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $1,700 dress. Lisa returns to Virginia a few weeks later to pick up the dress and drive it back to her Maryland residence, where she will use the dress. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is Roxy's sales tax collection obligation?

Question

Quizplus · Accepted Answer

Roxy's obligation is to collect the sales tax for Virginia, where the sale occurred, at the rate of 5 percent on the $1,700 dress, which amounts to $85. Sales tax is based on the location of the sale, not where the item will be used.

Roxy Operates a Dress Shop in Arlington, Virginia