By: Thomas Kearney, NFI Certified Master Hearth Professional
No Sales Tax: When Saving Now Can Cost You Later
Find out the potential risks of buying a fireplace from a seller that doesn’t charge sales tax
Last Updated: January 8, 2025
Wondering how that price is so low? Curious if sales tax is included? Concerned about an online fire retailer looking sketchy? Know how to look out for red flags!
Like any business, fireplace sellers must follow local and state tax laws. Whether or not they charge tax depends on:
- Business location
- Tax registration
- Nature of the sale
We’ll cover a few common reasons why a fireplace seller may choose not to charge sales tax — and why no sales tax may be more of a pitfall than a benefit.
No Nexus in Your State
Nexus refers to a business’s physical or economic presence (offices, warehouses, or significant sales) in a state that collects and remits sales tax.
If the fireplace seller is based in another state and doesn’t have nexus in your state, they may not be required to charge sales tax.
🚩Red Flag
If a fireplace seller doesn’t have nexus in your state, it could indicate that they’re not very reputable, or even legal. Buying from a seller that isn’t properly established could lead to issues with your order, shipping delays, no support, and possibly scams. You could make a purchase and never see your product. Or in the worst-case scenario, you could have your credit card information stolen.
Out-of-State Online Sellers
Some fireplace sellers may not charge tax for online purchases if they don’t meet your state’s nexus threshold (minimum annual sales or transaction volume).
However, many states have adopted strict rules that require out-of-state sellers to collect sales tax.
🚩Red Flag
To make their products appear cheaper, some fireplace sellers may intentionally avoid registering with any state for tax purposes. Not only does this raise concerns about their legitimacy and trustworthiness, but it can also lead to financial and legal consequences for buyers. Some states actively audit individuals for unpaid tax, especially for large purchases.
Tax Exemptions
In some states, certain products may qualify for a sales tax exemption, such as energy-efficient appliances, heating equipment, and wood stoves. If the fireplace you’re purchasing fits into one of these categories, the seller may not need to charge sales tax.
Additionally, if the buyer has a tax-exempt certificate (e.g., for a government agency, nonprofit organization, or resale purposes) and can provide proper documentation, the seller won’t charge sales tax.
Inclusion of Sales Tax in Price
Fireplace sellers may choose to include sales tax in the listed price of their products, rather than itemizing it separately.
In this case, you’re still paying tax, it’s just embedded in the total cost.
🚩Red Flag
Products offered at a much cheaper price could indicate that sales tax isn’t included in the retail price. You could experience surprise charges during the checkout process. Compare sellers — how much are other fireplace companies charging for the same product?
Why No Sales Tax Can Be a Bad Thing
While there are legitimate reasons why a fireplace seller might not charge tax, it can sometimes signal non-compliance or unethical business practices.
Non-Compliance with Tax Laws
If a fireplace seller is required to charge sales tax but isn’t doing so, it could mean they’re operating illegally or cutting corners.
Potential Liability for the Buyer
In most states, if a seller doesn’t collect sales tax, the buyer still owes use tax to the state. This leads to unexpected financial issues or penalties later on.
Always approach such situations with caution, ask for clarification, and ensure you are prepared to fulfill any legal obligations related to your purchase.
Undermines Trust
Not following basic legal requirements, like tax collection, suggests serious issues with a seller’s professionalism, legitimacy, and reliability for warranty support, product quality, or successful delivery.
Make sure you do plenty of research on a seller and read through customer reviews.
Possible Tax Evasion
Intentional tax evasion could indicate broader financial instability or unethical practices, such as underreporting income or avoiding regulatory oversight.
Hidden Costs
Some sellers may deceptively claim "no tax" but later include hidden fees to offset costs, leading to surprise obligations for buyers down the line.
Why You Can Do as a Buyer
Here are a few steps you can take to ensure your purchase is safe, legal, and worth the investment.
Ask Questions
Don’t be afraid to ask the seller directly why they aren’t charging sales tax.
You can ask for a detailed explanation or even request documentation; they should be able to provide both.
Check the Seller’s Legitimacy
Research reviews, business registration, and Better Business Bureau (BBB) ratings to ensure a seller is reputable before buying from them.
Understand Your Obligations
If the seller doesn’t charge tax, check with your state’s revenue department to determine if you owe use tax on the purchase.
Keep records of your purchase and report it when filing your state taxes to stay compliant.
What Woodland Does
At Woodland Direct, we go the extra mile to make sales tax as simple as possible for you.
During the checkout process we automatically verify your address and calculate sales tax. You don’t have to do a single thing! And you can rest assured you won’t have any tax issues at the end of the year.
We’re Here to Help
Do you have more questions? We’d love to help! Reach out to our NFI certified experts today at 800.919.1904.
More Resources
Find out how you can receive tax credit for making energy efficient home upgrades.
Are there gas burn bans in your area? Learn what the laws are regarding fireplaces to keep your home safe.
Sometimes, you need a pro for the job. Discover what an NFI Certified Expert is and how they can help you install any kind of fire feature.
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Tom Kearney has been a Technical Sales Representative at Woodland Direct for over a decade, where he has honed his expertise in gas, wood, and pellet appliances as an NFI-Certified expert. Tom's dedication to customer satisfaction is exemplified by his work with high-profile clients, including assisting SpaceX President Gwynne Shotwell in sourcing five stunning fireplaces for her Texas home. When he's not helping clients find their perfect fireplace, Tom enjoys hitting the golf course, skiing down snowy slopes, and exploring new trails on his bike. Call him or one of our experts in fire at 800.919.1904. |