Friday, July 27, 2018

Thrifty Thinking: Taxes on Textbooks

Millions of college students will soon buy textbooks online, and most online stores do not collect sales tax from out-of-state buyers – but that doesn’t mean students aren’t responsible for paying the tax.
Here’s what students need to know about textbook taxes – plus how to use the tax estimator to find out how much they owe:
  • Students must pay sales taxes on textbooks. If an online retailer doesn’t collect the tax at checkout, students must pay a “use tax” on their state tax returns
  • Sales taxes on textbooks can add up to $100 or more per year. Some state tax rates are over 10%, which amounts to $125 per year for average textbook purchases
  •’s new tax estimator tool makes it easy for students to see how much tax they’ll pay, and when. Students can use the free tool to identify which stores collect tax at checkout, so they can decide whether to pay it now or wait to pay it at a more convenient time on their state tax returns
  • There are some loopholes. Students who live in and buy from retailers in states that do not collect sales taxes are exempt (though they may still need to pay local taxes). In addition, some states exempt textbooks from sales taxes under certain circumstances, such as when buying textbooks from campus bookstores
  • South Dakota v. Wayfair likely won’t have an effect this year.The recent Supreme Court decision allows states to require online retailers to collect sales taxes from out-of-state buyers, but it’s not certain if or when states will enact such laws. In the meantime, students are still responsible for paying sales taxes on textbooks – whether the tax is collected at checkout or not
The new tax estimator tool is part of’s commitment to helping students save an average of 50 percent on textbooks by finding the best prices for new and used textbooks, textbook rentals and e-textbooks. To-date, our free service has helped more than 35 million students save more than $200,000,000 on textbooks.

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