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James Allen is a popular online diamond retailer.
Like other online diamond sellers, they offer consumers the option to buy directly, saving money by cutting out the brick and mortar retail store.
This allows you to cut costs while still getting a high quality diamond.
Although James Allen can save you money, you may still have to pay sales tax on your orders. James Allen actually offers a pretty solid calculator to figure out how much you'll be charged.
Whether or not you’ll have to pay taxes or duties depends on the state or country where you live.
Here, we’ll discuss the situations where you’ll have to pay sales tax on your order from James Allen. Although the company does charge sales tax for a majority of states, there are a few solutions that will allow you to pay a lower tax rate, or even no tax at all.
Why Does James Allen Charge Sales Tax?
American sales taxes can get quite complicated, with the taxes varying widely depending on the state. There are four states that don’t even have a sales tax.
Whether or not you have to pay a sales tax on James Allen jewelry will in part depend on where you live. If your state does not have a sales tax, the company will not have to charge any added tax on the order.
States with no sales taxes include Oregon, Montana, Delaware, and New Hampshire. If you live in any of these four states, James Allen will not add a sales tax to any rings or jewelry.
Read Also: Is James Allen A Scam?
Sales Taxes Are Paid In Any State Where James Allen Is Licensed
However, the situation is a bit more complicated if you live in a state that has a sales tax. State laws claim that any business operating with a license within that state must charge sales tax. That means that you’ll have to pay state tax if you live in any of the states where James Allen is licensed. Although the company only has physical locations in two states, it’s licensed in the majority of states.
In total, James Allen charge sales tax on 34 states. Here’s the full list:
Alabama, California, Colorado, District of Columbia, Connecticut, Hawaii, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, Washington, Wisconsin, Wyoming, Georgia, Iowa ,Nebraska, Utah and West Virginia.
Again, remember that the sales tax varies widely depending on the state. In Colorado, the sales tax rate is just 2.9%. However, in California it’s 7.25%.
How To Calculate The Tax On James Allen Jewelry?
The sales tax on your order is easy to calculate, as it’s based on the state where you plan on shipping the diamond to. To find out how much you’ll have to pay in sales tax, just look up your state’s tax rate and multiply in by the cost of your order.
For example, California has a sales tax of 7.25% on any sales made by a business licensed in the state. If you order $5,000 worth of jewelry and ship it to the state, your sales tax on the order will be $3625. James Allen will automatically calculate this amount and add it to your order once you add in your shipping address.
Is There A Way To Buy James Allen Rings And Jewelry Tax Free And Duty Free?
Although James Allen does charge sales tax on most states, there are ways that you can avoid the tax if you live in the US. One common way is to ship your order to one of the states where the company does not have a license. In these states, the company is not required to charge a tax.
You can find the list of states where James Allen charges state tax on their website. There are 16 states where you won’t have to pay any taxes on your order, even though some of these states do have a sales tax.
Shipping To A State With A Lower Sales Tax
This practice is legal, since the tax is calculated based on the state where the order is delivered to, not the buyer’s state of residence. It’s just like if you drive across to a neighboring state and buy something there. Even though you’re not a resident, you pay the tax rate of the state where the purchase was made.
However, it can be difficult in practice, as you have to have somewhere to ship the order to in another state.
If you have a friend or family member who lives in the state, you can have the order delivered to them, and they can then send it to you. Although this can get a bit complicated, it can save a substantial amount of money, especially on expensive orders.
Also keep in mind that the courier will ask for a signature upon delivery. If you list your name for the order, the package may get returned, especially if the person accepting it has a different last name.
You will not be able to use a PO box to ship the order to another state. James Allen uses FedEx for its domestic orders, and FedEx will not deliver to PO boxes. If you try to list a PO box at checkout, the address will not be accepted.
What About Shipping Overseas?
If you ship an order to another country, you will likely have to pay import duties. Unfortunately, there is no easy- or legal- way of avoiding import duties. Any solution ends up costing more than the taxes themselves, and puts you at risk of getting into trouble with customs.
The company works with FedEx and USPS to ship diamonds. The courier who ships the order will contact you and charge you for any duties that are owed. Since the courier bills you, there’s no practical way of getting out of this charge.
You can try to ship the order to a country with a lower import duty, and then have the item shipped to you. Although this may work in some cases, in can end up costing even more, and you may get in trouble with customs. You also increase the risk that the order is lost in transit.
Taxes On James Allen Orders
When you’ve already spend thousands of dollars on a jewelry order, you’ll want to save as much money as possible. Fortunately, there are some ways that you may be able to get out of paying taxes on James Allen orders.
James Allen will charge sales tax on the majority of states in the US. However, you can get out of this tax if you change the address of the order. You can have the order shipped to a nearby state with a lower sales tax, or to one of the 16 states where the company does not collect any sales tax. You’ll pay the tax rate of the state where you ship the order to, not your state of residence, potentially saving you a substantial amount.
Read Also: Does James Allen Offer Payment Plans?
If you live in one of the 34 states where James Allen charges taxes and you are unable to send the order to another state, there are still ways that you can buy jewelry online without paying taxes. There are many small online diamond sellers don’t have business licenses most in US states. That means that they can ship to you without any added sales tax.
If you live overseas, getting out of import duties is much more difficult, as the courier who ships the order will charge you based on the destination. Unless you ship the order to another country with lower import duties, there is no simple way of avoiding taxes on international orders.