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They will charge you sales tax if you buy it in person and walk out of the store with it. The only way to avoid tax is to have them mail it to a location out of state. So you could order it online for example and have the online seller mail it to wherever mom is staying.
But you have to deal with bringing it back to the U.K., don't you have to declare it?
I may be wrong (likely) but as far as I know the US doesn't have the taxes like Europe has. Could that adjust the price? Or are the diamonds just priced better for a bigger competitive market? I know when you do out of state purchases the vendor cannot collect sales tax.
He'd probably be better off buying one online. I live in the US and there are some great places to buy diamonds, but I've never seen that extreme of a different with tax free shopping (like having things offline sent to a store for purchase). Buying online allows you to cut out a lot of the overhead of all the people who are handling your diamond. If he'd rather choose one and have her pick it up, try the folks at Good Old Gold. You can browse the site and she can buy in store. They also give a discount for wire transfers.
Sales tax in the US is a lot lower than the UK, but you legally have to declare it and pay the extra UK tax on it in customs. (Same goes for anything you buy with a value of over £300 if I remember correctly).
Inland Revenue's webpage has all the info you need if you want to know more.
So... my DH didn't pay tax because he paid in cash and the diamond district in NYC is kinda shady.
if you go into a diamond shop/jewelry store (most likely not a chain store) and pay cash they typically won't charge you sales tax
@littlebear2171: Agreed! That's what my FI did, and he had an easier time negotiating.
i know Oregon doesnt have sales tax so if she's headed to the Pacific Northwest she could get it for you from there. But i have no clue how it works when she brings it back to the UK.
Some states do not have sales tax and some have luxury taxes (which diamonds would fall under depending on the tax codes), but you would still have to declare a diamond when re-entering the UK which you can get around sometimes if you are wearing the ring and have the paperwork mailed to your address.
From what others from the UK have said here on the boards, it did sound like it was cheaper than there since we dont have the VAT tax at almost 20%, just local state taxes which are anywhere from 0-8% usually depending on the state.
You are *always* supposed to pay taxes. If you order a diamond online and you live in the state where the company you are ordering from has a corporate office, you will have to pay taxes on the spot. HOWEVER, even if you don't live in the state and aren't charged taxes at the time of purchase you are supposed to report the purchase and pay your state taxes within your home state. If you live in a different country, you will have to pay taxes when the item passes through customs.
For example: If you order from James Allen, their corporate office is in New York, so if you reside in NY or have the item shipped to an address in NY, you will pay taxes. You can avoid taxes by having the item shipped to a Fedex location outside of NY, or pay someone in the diamond district under the table (cash) but this is illegal.
I have lived in two states that do not have sales tax and jewelry tends to be the same cost in locations with sales tax and without. The only difference is the 3-9% the taxing states tack on the to the final sale.
@Over the Moon: Need to investigate that one... but I thought, if she bought it 'for herself' and wears it back, she won't need to pay tax?... just trying to explore our options for potential save (or potential bigger diamond ;))
@KatyElle: Yes, he would be chosing it himself and just get it posted to his sister home address (she lives out there). We were looking at Blue Nile, as it looks like a decent website. Good reputation and you can see diamond certificates prior to buying.
@allergicbee: That was a little confusing for me :) Sorry...
So, the sister lives in Florida... We are thinking of buying from BlueNile (is James Allen better? I only just stumbled accross that one the other day and haven't had a chance to investigate properly).
We know that 'technically' it would need to be declared at customs, we'll get his mom to wear the ring and, like @tksjewelry mentioned, get paperwork etc mailed to us separately. Looks like it'll save us around £1k! Which is quite considerable and, if I get my way, means I can get a better rock (as opposed to my FTB saving cash :))
@Carnival_Bride: Perhaps, but you aren't comparing this to UK taxes... we pay 20%! :(
Thanks to everyone who's replied!!!! We're still looking into it and, although, I am becoming impatient and almost thinking that I'd just want my ring and proposal NOW (bridezilla, I know!), this could be a good money-saving idea and, why the devil not, if the opportunity is there?...
@wedmewedmenot: but I thought, if she bought it 'for herself' and wears it back, she won't need to pay tax?
No, its not that she doesnt need to pay tax if she wears it back for herself, its just that she can sneak it by customs by making it look like she wore it over and back since no one would know the difference. I'm pretty sure thats actually illegal though, but Im sure people do it ALL the time. I may or may not have done it before myself :-X
@pinkshoes: Sorry! Got a bit confused writing this, yes, that's how I understand it too, not that she bought it for herself, but that she owned it before going over! Doh! :)
I've never done that myself, but my boyfriend's mom is a lovely little lady, fingers crossed she doesn't get frisked and cavity examined etc. :)
Like I said, this is still an option we are looking at so not sure what he'll go for in the end. He just asked my permission to explore it and I thought I'd check on here, whether anyone had any experience with such a 'transaction'
@bearlove: Not 100% comfortable with that...
Yes, you can definitely avoid tax if you want to! When we got my ring, we bought it in Chicago and had it shipped to my parents' vacation house in Wisconsin, thus avoiding state sales tax. To avoid VAT, we were actually advised by the jeweler we worked with to just wear the ring into the country rather than putting it in our luggage (not that we'd feel comfortable checking it in our bags anyways). He said that he's recommended that to a lot of his international clients, and it worked for us! We saved 10.5% Chicago sales tax, and 20% VAT.
Since you want your FTB's mom to buy it, you may have issues with tax. If there is a way that you can order and pay for the ring online and have it shipped somewhere (maybe to the wherever she's staying at?) so your she can pick it up that would certainly work. Just remind her to carry it with her on the plane and not check it in her bags/declare it.
You can save paying VAT in the UK on diamonds by buying antique or second-hand jewellery. Well worth looking in some reputable antique jewellers for diamonds.
That way you're saving money without breaking the law!
Delaware doesn't have sales tax. We got the rings there. Of course we're only about 20 minutes from there so it wasn't a big deal.
This depends, not all states have sales tax as PP's said. Also, company's like Blue Nile cannot charge you sales tax if they do not have a sales presence in that state. One of them I know if is California so if you purchase from BN and have it shipped to california you avoid having to pay sales tax.
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Hello Ladies (and gents?)
Hoping you can answer my query...
I live in the UK and was told today, that in some states it is possible to buy a diamond ring 20% cheaper due to lack of Tax! Is this true? My FTB's mom is travelling to the US in the next couple of months, is it worth him picking out a ring and getting her to buy it while she's there?
Or is it, indeed, too good to be true?..
Thanks in advance :)