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Flying to Dubai from JFK, I went to a shop with only $14 left so I decided to spend it. Then the tax was added on afterwards. I thought all shops in the international lounge were duty free world wide.

Also there seamed to be local flights from the same terminal 4 building at JFK.

Do duty free shops differ from country to country?

Why are some shops duty free and not others at JFK international airport?

I was always under the impression that international departure lounge was international territory so taxes didn't apply, similar to when I bought something at the United Nations in New York.

I find it strange that some shops are allowed to be duty free and compete with shops that have to pay sales tax.

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  • Generally speaking, shops can only be duty free for passengers departing the country and/or customs zone. Some shops with only small numbers of domestic passengers may opt to cover the tax/duty themselves for simplicity, others will refuse to serve you unless you have a suitable international boarding pass – Gagravarr Jan 13 '16 at 9:57
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    Technically, duties and sales tax aren't really related, anyway. Duties are charged at a federal level, and sales tax at a local (usually state or municipal, but might include county or even township) level. In practice, it's likely that you would never pay sales tax on any duty-free items, but you could easily pay duties on sales-tax-free items. – Flimzy Jan 13 '16 at 11:21
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    And the international departure lounge is certainly not international territory (unlike the situation of the UN headquarters, which is governed by a special agreement). In some cases, the international departure lounge may be subject to special rules (e.g. the ability for passengers to transit without passport control, though this is not available in the US), but it's definitely sovereign territory of whatever country the airport is located. US airports commonly have domestic and international flights leave from the same terminal as well. – Zach Lipton Jan 13 '16 at 18:43
  • Aside from the point that duty-free is often not cheaper at all. People tend to not compare prices, as they are on the run, and 'it must be cheaper as it's duty free'. Check it, often times you pay more in duty-free shops then in a normal super market. – Aganju Jan 15 '16 at 2:55
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Duty is not the same as sales tax. Sales tax is a local, city burden on a business and varies from type of business, type of item, value of item and the state you are in.

A duty (more specifically customs duty) is a federal restriction and this applies universally across all borders of that country.

So - it is perfectly fine to buy an item with a sales tax that has no duty, and of course an item without a sales tax that is subject to duty.

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  • How come when I bought alcohol from the duty free shop I didn't pay sales tax or duty at the one shop but at the other I paid both. – user1898829 Jan 15 '16 at 6:44
  • It may depend on the type or quantity of alcohol. – Burhan Khalid Jan 15 '16 at 9:03
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    @user1898829 Not every jurisdiction imposes a sales tax on alcohol. Both the State of New York and the City of New York do collect an excise tax, but this is collected from the distributor rather than the consumer, so it would have been built into the price. Overall, the consumption tax situation in the U.S. is insanely complicated, but because it is a primary way of funding local and state governments, that is unlikely to change. – choster Jan 15 '16 at 15:38

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