Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $1,500 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 the state where the sale occurs, which is Virginia. The sales tax rate in Virginia is 5 percent, so on a $1,500 purchase, the sales tax would be $1,500 x 0.05 = $75. There is no obligation for Roxy to collect Maryland's sales or use tax because the transaction and delivery occurred in Virginia.

Roxy Operates a Dress Shop in Arlington, Virginia