How to Get Rid of Sales Tax on TEMU? [2024]

How to Get Rid of Sales Tax on TEMU? TEMU (Top E-commerce Merchants United) is an online marketplace launched in 2022 that connects buyers and sellers across the globe. As an e-commerce platform, purchases made on TEMU may be subject to sales tax in some states.

However, there are legitimate ways to avoid paying sales tax when shopping on TEMU in 2024. This article will discuss multiple methods to legally get rid of tax on TEMU.

Understanding TEMU Sales Tax on Online Purchases

Before exploring ways to avoid sales tax on TEMU, it’s important to understand when and why sales tax applies to online purchases. Sales tax is a tax imposed on the retail sale of goods and services. It is assessed as a percentage of the total transaction value.

In the United States, most states impose sales tax on purchases made within that state. However, when buying from an online retailer like TEMU, sales tax rules differ across states. Following are some key points about sales tax on online marketplaces:

• If the seller has a physical presence/nexus in the buyer’s state, they are required to collect state + local sales tax at the time of purchase. This is called destination-based sales tax.
• For sellers who don’t have a physical presence in the buyer’s state, tax may or may not apply depending on each state’s rules.
• Most states have implemented destination-based sales tax laws requiring both online and offline sellers to collect tax on sales to their residents.

So in summary, whether sales tax applies to your TEMU purchase depends on the seller’s tax nexus as well as your state’s sales tax laws.

Evaluating Your State’s Sales Tax Laws

The first step to legally avoid sales tax on TEMU is to closely evaluate your state’s sales tax laws in 2024. As mentioned before, most states have evolved their rules in recent years to apply destination-based sales tax to online transactions. However, there are exceptions you can benefit from.

Things to specifically look for in your state’s 2024 sales tax statutes:

• No Tax on Digital Goods: Some states waive tax on purchases like ebooks, music downloads, etc. If you majorly shop for digital goods on TEMU, no tax would apply.
• Low or No Tax Thresholds: Many states set minimum annual spending thresholds (e.g. $10,000) or low tax rates for small online sellers who don’t have local presence. Purchases from these sellers can save you sales tax.
• Exemptions for Specific Products: Several states provide full or partial sales tax exemptions on certain “essential” items like groceries and medicines. Check if your commonly purchased categories on TEMU get this benefit.

By taking advantage of these special rules and exemptions, you can legally avoid paying excess sales tax on TEMU in 2024. The specifics will depend on your shipping location/home state.

Buying from Untaxed Sellers

Another straightforward way to dodge tax on your TEMU purchases is by transacting only with sellers who don’t charge tax. As we discussed before, third-party sellers on e-commerce sites may not have tax nexus in your state.

Here are some tips to identify “no sales tax” sellers on TEMU in 2024:

• Location Filter: When browsing listings, apply a filter to only show items shipped by sellers located in tax-free states. For example, if you reside in California, sellers from Oregon or Delaware won’t charge tax.
• Seller Profile: Thoroughly examine seller profiles and store policies to find mentions of tax collection rules. Most sellers explicitly state if they collect taxes in various states.
• Transactions History: Your past order invoices will indicate exactly which sellers collected sales. Favor these “no tax” sellers for future purchases.

By limiting your transactions only to untaxed TEMU sellers, you can completely avoid paying sales irrespective of your state’s policies. Just ensure the items you purchase comply with your state’s use tax rules.

Using Coupons and Cash Back

TEMU routinely issues coupon codes and generous cashback offers to encourage customers to shop on its platform. By stacking these savings on top of each other, you can effectively reduce sales tax to zero on select purchases.

Here are some examples to demonstrate this:

Jane from New Jersey buys a $1000 refrigerator from TEMU. The sales rate in her state is 6.625% i.e. $66.25. But she uses a 10% off TEMU coupon and 10% cashback from Rakuten on this purchase. So her final order value is $900 after discount i.e. $90 sales tax. When she receives $100 as 10% of $1000 cashback from Rakuten, it entirely offsets the $90 sales amount. So the refrigerator becomes sales free for Jane.

Similarly, with the right coupons and cashback bonuses, you too can bypass sales tax on heavy-ticket TEMU purchases. Note that the discounts must fully cover the sales portion for this hack to work.

Buying Tax-Free from Amazon using TEMU Coupons

This is an interesting hack to avoid tax on Amazon orders by leveraging TEMU’s coupons. As you may be aware, Amazon has tax nexus in most states hence charges destination-based sales tax to residents.

However, Amazon accepts coupon codes issued by competitors like TEMU to offer indirect discounts. So you can buy items tax-free from Amazon in this sequence:

• Search for your desired product on TEMU
• Find and copy any available coupon code for that item
• Visit Amazon and add the product to cart
• Before checkout, enter the TEMU coupon code and avail discount
• Since Amazon treats this as retailer coupon, they deduct discount from the item cost itself, not tax!

So essentially, you get cash savings on the base product price which helps avoid tax. Do cross-check the final checkout cost before ordering as the discount percentage can vary. Also, check if there are any complementary Amazon coupons you can add to lower price further.

Shipping to Sales-Tax Free States

This method involves shipping your TEMU order to postal addresses in US states that don’t impose any sales at all. As of 2024, there are still 5 zero-sales states:

1. Oregon
2. Montana
3. New Hampshire
4. Delaware
5. Alaska

So even if the TEMU seller charges you tax, it will be zero when items are delivered at these 5 destination states.

Of course, you’ll need access to mailing addresses of friends, family or even commercial package forwarding services based out of the above zero-tax states. And depending on where your seller is located, additional shipping fees can apply. Still, this approach does legally let you bypass sales tax completely when ordering through TEMU.

Qualifying for Resale Tax Exemption

If you hold a state tax exemption certificate for reselling goods, you can forward the same to TEMU sellers when ordering. Common examples are:

• Sales tax resale permit
• Reseller license / permit
• Waiver certificate
• Exempt purchase certificate

These documents exempt your purchase of inventory for resale to end consumers from state tax. Just register your tax ID/EIN, submit the necessary application forms, and fees to obtain your state’s resale authorization certificate.

While this method incurs additional regulatory paperwork for your business, it gives 100% tax exemption on TEMU supplier purchases. You simply email/upload your tax waiver documentation while ordering there. Just ensure you actually resell those items later.

Join TEMU as a Seller

This one is quite controversial but can legally exempt your own TEMU transactions from tax. Simply become a TEMU seller yourself and change the order buyer to your own customer account!

As a merchant selling goods to customers, your own item procurements or transfers are considered tax-exempt business purchases. There could be restrictions on doing self-checkout as buyer and seller. But many ecommerce platforms do technically permit tax-free internal transfers between your seller and buyer profiles.

While TEMU’s seller policies should be studied in detail before applying this method, it does present an avenue to avoid tax on your buying activity by switching roles. Just consider applicable listing fees, commissions, etc before taking this approach.

Conclusion

We have discussed seven practical techniques to fully or partially avoid paying tax on your TEMU orders in 2024. The latest destination-based taxes can increase purchase costs significantly for frequent shoppers. Hopefully, these compliant tax exemptions provide some relief through lower out-of-pocket spending. Remember to stick to your specific state’s rules and regulations to realize tax savings when buying on TEMU’s marketplace.

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