Tax and Duty Comparisons

[JacobH]

Has anyone come across a website which gives the tax/duty rates on wines in different countries? I always find it interesting to see what prices people are paying for Port in other countries but with rates varying so much from country to country (and in America, I believe from state to state), it’s often a bit tricky to work out what the “real† price is, behind the tax. A complicating factor is the question how widespread the duty distinction between fortified and non-fortified wines is. We, in the UK, suffer particularly from it (the tax on every bottle of Port starts at about £2.50 (duty+VAT on the duty) and increases from there), but I wonder if this is an EU-only problem.

[DRT]

the tax on every bottle of Port starts at about £2.50 (duty+VAT on the duty) and increases from there

Jacob,

I think the final part of your description implies that there is some sort of escalation in duty and tax rates depending on volume, which isn't the case. Just to make it clear for non-UK readers, the Duty of £2.50(ish) per bottle is added to the pre-tax cost of the bottle and then the entire cost (wine+Duty) attracts VAT at 17.5%.

I have purchased wine from quite a few EU countries and have not come across the equivalent of Duty. VAT tends to fluctuate from one country to another, typically between around 17-19%.

Derek

[Andy Velebil]

jacob,

In the US tax rates vary by county (a small area within a state). In Los Angeles County it is 8.25% and if I drive a few miles down the road to Orange County it is only 7.75% Luckily I buy most of my stuff in the OC

However, generally if I buy from a retaler outside the state of California and ship it into my state I am exempt from paying sales tax. So for large orders I perefer to do that as even with shipping costs its cheaper to buy outside Cali and have it shipped in to avoid the tax.

[DRT]

However, generally if I buy from a retaler outside the state of California and ship it into my state I am exempt from paying sales tax.

Is that the law or is it just luck in that the source State doesn't charge tax for "Exports" and the authorities in CA don't catch it coming across the State line?

[Andy Velebil]

Most states only charge sales tax for items bought in a state where you are physically at. If you buy it over the phone and have it shipped, then there is no tax as you are not physically buying it in the state (makes no sense, huh?). Some states do charge sales tax no matter what and some don't.

My only problem is that many auction houses have offices in California, which means they do business here as well. So if I buy from a company that also has a "presence" in California, then I have to pay the appropriate sales tax no matter what. A bit confusing, just like our 3-tier system of alcohol laws.

[RonnieRoots]

In the Netherlands, duty is already incorporated in the price. VAT (19%) is sometimes exclusive, sometimes not.

Duty is around 90 cent per (0,75l) bottle. This seems reasonable, but it is paid by the importer. Retailers usually multiply their wholesale prices by 1.8 to 2.0 (including VAT), so the consumer pays 1,60 to 1,80 extra.

[JacobH]

I think the final part of your description implies that there is some sort of escalation in duty and tax rates depending on volume, which isn't the case. Just to make it clear for non-UK readers, the Duty of £2.50(ish) per bottle is added to the pre-tax cost of the bottle and then the entire cost (wine+Duty) attracts VAT at 17.5%.

I have purchased wine from quite a few EU countries and have not come across the equivalent of Duty. VAT tends to fluctuate from one country to another, typically between around 17-19%.

Yes, indeed, I should have made it clearer that I was refering to the total tax payable going up from c.£2.50 (which is the minimum payable on any bottle, irrespective of its sale price).

I’ve never understood why the UK persists in high levels of Duty on alcohol, especially for wines and spirits where there can be such a variation in the price of a bottle. In terms of progressive taxation, surely it makes no sense that about 40% of the price of an £8 bottle is tax, whilst for an £80 bottle its more like 18%? The higher band of duty on fortified wine is also a bit silly now, with alcohol levels in non-fortified wines increasing so much.

Most states only charge sales tax for items bought in a state where you are physically at. If you buy it over the phone and have it shipped, then there is no tax as you are not physically buying it in the state (makes no sense, huh?). Some states do charge sales tax no matter what and some don't.

My only problem is that many auction houses have offices in California, which means they do business here as well. So if I buy from a company that also has a "presence" in California, then I have to pay the appropriate sales tax no matter what. A bit confusing, just like our 3-tier system of alcohol laws.

Ah, that’s interesting. I had assumed it was done by state not county. We should probably note Delaware not charging any sales tax whatsoever in your paragraph!

-Jacob

[Glenn E.]

Most states only charge sales tax for items bought in a state where you are physically at. If you buy it over the phone and have it shipped, then there is no tax as you are not physically buying it in the state (makes no sense, huh?). Some states do charge sales tax no matter what and some don't.

At least in theory, though, aren't you supposed to pay Use Tax on goods purchased out-of-state?

I know Washington has a law like that, and I know that it applies to most goods purchased out-of-state and imported by hand, but I'm not sure whether or not it applies to goods bought over the phone and shipped into the state.

(No one I know pays Use Tax, and I've never heard of it being enforced, but it's there.)