For Online Shoppers, Best and Worst States to Live In
After analyzing each state's online sales tax rates, along with the varying shipping times and costs, Extrabux came up with a list of the top five best and worst places to live.
Online retailers are fighting to avoid having to pay sales taxes where they aren't physically present or where they have only distribution centers, as Amazon is doing in Tennessee, because they and sites such as Extrabux could lose a lot of money if such tax laws go into effect. Amazon claims its distribution centers aren't retail sites but simply shipping points.Most states don't require online-only retailers to collect sales tax. Some states try to collect the sales tax directly from taxpayers. Living in Delaware, or any of the other top states for online shoppers, could get dicier if such laws are passed.
Extrabux looked at how long it would take a UPS shipment to arrive from a retailer distribution center. The majority of distribution centers are in a region with a delivery time of one to two days, mostly in the East.
Here are the five best states for online shoppers:
It takes 2.74 days in average shipping time (6th shortest in U.S.), $4.07 average shipping costs (tied 3rd lowest) and 0% sales tax (tied 1st lowest).
Its proximity to East Coast distribution centers, and with only 5% of online retailers charging sales tax to Mississippi residents, it's the top Southern state.
3. New Hampshire
Residents wait 3.52 days on average for their packages. They never pay sales tax online. Extrabux suggests using that savings on expedited shipping.
4. West Virginia
This state has the quickest average shipping time in the country -- only 2.72 days. The state is between distribution center hubs in Pennsylvania, Ohio and Kentucky and has a little retailer presence itself, resulting in few online retailers charging sales tax to its residents.
Residents pay 0% sales tax on their online orders, but delivery times are less consistent than other states. An order from a West Coast distribution center can take a day or two to arrive, but coming from the East Coast can take almost a week, with shipments averaging 3.8 days to Oregon.
Here are the five worst states:
The sales tax is 4.25% on average, but paying the equivalent of overnight shipping for the slowest shipping times in the country makes Hawaii the worst place to live and be an online shopper. An average order costs $19.17 to ship here and takes 4.57 days to arrive.
It also has low online sales tax (1.7% on average), but shipping rates and times are almost as bad as Hawaii's.
About half of online retailers charge sales tax to California residents, which is more than in any other state. The state has an average sales tax of 8.96% (2nd highest) and an additional 4.5% in sales tax costs, on average. Californians wait four to five days for shipments coming from an East Coast distribution center.
47. New York
New York residents pay, on average, 8.16% in sales tax with about 46% of retailers charging sales tax to the state's online shoppers. Shipping times, however, are usually quick.
Long shipping distances give it the slowest average shipping time of all states in the continental U.S., and the most expensive shipping costs. The state has the fifth highest average sales tax rate at 8.45%.
Now let's see if these stats encourage more Hawaiians to move to Delaware.
Aaron Crowe is a journalist in the San Francisco Bay Area.