Costs of Trump’s Tariffs Subject to Sales Tax, States Clarify

California, Illinois, and Washington have clarified that the Trump administration’s tariffs on most imported goods are subject to sales tax in response to taxpayer inquiries, and practitioners are looking for more states to provide guidance.

The Illinois Department of Revenue recently released a letter stating the tariff portion in the price of an imported product is subject to the state’s sales and use tax, whether the amount is separately stated or embedded in the final selling price. The only exception to this general rule occurs when the importer is also the end user of the product.

The Washington Department ...