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Guest Peterpools

Bad News - Sales Tax

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Guest Peterpools
Posted (edited)

The Supreme Court has reversed an earlier court ruling that will allow states to charge sales tax on all

purchases on line, regardless where you live. So the days of no sales tax when buying on line from

out of state vendors is over: rats!

Peter

Edited by Peterpools

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Posted (edited)

Honestly, the majority of my online purchases I've already been paying sales tax.  We have Amazon here in town, so everything I get is taxed. Same with my Walmart purchases.

 

I feel sorry for the thousands of different tax codes online sellers are going to have to comply with.  With each county within a state throwing their percentages on, it's going to be a mess.  Congress should act on this to keep confusion to a minimum.  County taxes should be thrown out the window so retailers only need to deal with 50 different state tax codes.

 

Hmmm.....I hope our pre-ordered Lancasters are grandfathered in. :frantic:

Edited by ScottsGT

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Guest Peterpools
Posted (edited)

Scott

I'm not sure as all this just happened yesterday but sales tax is supposed to be added to all purchased as the normal tax you would have paid at a at the store of purchase and not where you live.

No matter where I live and purchase an item lets say in Nashua, New Hampshire - i pay the total sales tax as charge by any brick and mortar store in that city. Slowly but surely the advantages of on line buying besides convenience and or selection are being chipped away at. Since tax now is added to the sale plus shipping, the only difference would be the discount and that may be very little or a lot; just depends.

I'm sure in the cost of collecting and paying the tax by vendors will also increase their costs as well and will show up in the selling price.

:(

Peter

Edited by Peterpools

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You want more bad news, Peter...

 

The U.S. is literally on the brink of an actual TRADE WAR with China.

 

This to some might sound like politics, but in reality, it is economics.

 

They are thinking of slapping tariffs (basically, another word for a type of tax) on all good imported into the U.S. from China.

 

I do not see Chinese made kits as exempt, since there are still U.S. based manufacturers like Lindberg, AMC, and Williams Brothers.

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Guest Peterpools

Who knows but tariffs are supposed to equal out costs of good from all countries. My guess which is normally worth very little, is the hope will be for American manufactures to abandon having their products made in China at cheap prices and have those products manufactured made here again. In either case, we'll be paying more; a lot more

Peter

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If you were in Nashua, New Hampshire, you'd actually pay no sales tax! I used to live in Maine and they would pass out forms at the toll booths on the border, reminding you that your purchases in New Hampshire were taxable in Maine if you're a Maine resident. Somehow I always lost them.

 

This will be a disaster for small online businesses. The costs on the backend will be huge. At one point I managed sales tax in 14 states for our small business, and keeping up with all the local and regional changes was nearly impossible. There are services you can pay for that will integrate with your POS or online checkout software, but you're looking at probably $10K per year just for a service that will let you do a zip code lookup and calculate the tax. You still have to do all the reporting and actually pay the states, counties, and cities individually. Texas, Alabama, Tennessee, California, and Louisiana are absolute NIGHTMARES. Different tax on one side of the road than the other. Library tax. Fire department tax. Mass transit tax. One sale might require reporting and remitting tax to 3,4, or more jurisdictions.

 

The original plan for this mess was to streamline the state sales taxes, but that never happened.

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Who knows but tariffs are supposed to equal out costs of good from all countries. My guess which is normally worth very little, is the hope will be for American manufactures to abandon having their products made in China at cheap prices and have those products manufactured made here again. In either case, we'll be paying more; a lot more

Peter

 

This has been going on for so long, we'd have to re-create the technology to make the technology. The biggest cost in model kits is tooling the molds. We gave up on injection molding long ago because the Chinese can create the molds for pennies on the dollar to us. We have no machinists left.

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Guest Peterpools

Agreed on all accounts - in theory it works but in reality most likely it wont.

I only picked Nashua as that is where Scale Hobbyist is located and I am assuming I will be paying the sale tax for that area when I buy from them in the future when all this gets cranking.

:(

Peter

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Look at it this way. For years we have been getting away with not paying sales tax on stuff we buy on the internet. So they finally caught up to our avoidance of paying the sales tax.

OK, so we got away with it for years and now they caught up to  us.

So what?

Just be thankful for what we did not have to pay all these years.  :wicked:

:punk:

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Guest Peterpools

Stephen

Not sure sure I agree in full. I'm only guessing but when we compare pricing on line, add in shipping and taxes, this might change who we buy from. If a vendor is located in a high tax state, they will be at a disadvantage as on line, all vendors look the same.

Peter

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Agreed on all accounts - in theory it works but in reality most likely it wont.

I only picked Nashua as that is where Scale Hobbyist is located and I am assuming I will be paying the sale tax for that area when I buy from them in the future when all this gets cranking.

:(

Peter

 

Unfortunately, it doesn't work that way. The reason this has been a battle, is whatever state you live in feels that they've lost out on your tax money because you bought online. If you buy from out of state, you are required to pay Use Tax on the item if you didn't pay tax on it when you bought it. For online purchases, this means now that you will be charged whatever local taxes apply at your address, but the seller has the burden of collecting and remitting that tax to your state.

 

So if I'm in New Hampshire, where there is no sales tax, and I sell an item to someone in Horsefart, Texas, I will now need to collect Texas state tax at 6.25%, Bumble county tax at 1%, Horsefart library district tax at .25%, Horsefart fire dept #4 tax at .25%, and Bumble Mass Transit tax of .25%. So, register with the State of Texas, get the forms, fill them out, and remit quarterly or whatever.

 

This also opens up all those businesses to now pay Franchise Tax in these states because they are "doing business".

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Stephen

Not sure sure I agree in full. I'm only guessing but when we compare pricing on line, add in shipping and taxes, this might change who we buy from. If a vendor is located in a high tax state, they will be at a disadvantage as on line, all vendors look the same.

Peter

 

You will pay tax based on where YOU are, not the vendor, so vendor location doesn't really put one at a particular disadvantage. If your local tax is 6%, you'll have 6% added on no matter who you order from. Sales tax is levied on where the product or service was delivered. Typically, if you ship a product out of state, sales tax does not apply - unless you have a connection to the state - a brick and mortar location, a warehouse, employees, salespeople. This is called Nexus. This ruling throws nexus out the window and puts the burden of sales tax on the sellers. The buyer is supposed to pay use tax on any items purchased out of state on which they didn't pay retail sales tax at the point of purchase. It just hasn't been enforced. If you look at your state income tax form, you'll probably see an entry for it. It looks like you live in New York. If you went to New Jersey and bought a kit at a retail store and paid NJ sales tax on it and brought it back, no harm, no foul. However, if you drove to New Hampshire and bought a kit, New Hampshire has no sales tax. According to the letter of the law, you are obligated to declare that on your income tax forms and pay NY Use Tax on that item. Same with anything bought online. People just don't do it.

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Guest Peterpools

If that is how this whole tax issue works - I just can't see it working at all. It's might be one thing for a large on line vendor to have software and the means to accomplish this but the smaller vendors; it has to be a nightmare.

Just might be the ticket to get me in the SUV an take the two hour drive to my LHS and pay full price.

Peter

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It looks like the Supreme Court has left it up to individual states, only deciding that the practice itself is constitutional. One state has already decided that sellers with less than $100,000 in annual sales or less than 200 individual transactions in that state would be exempt. It remains to be seen what the other states put into place.

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Guest Peterpools

Just seems to make the whole tax procedure a complete nightmare. As a consumer I am assuming if I buy from Scale Hobbyist and Sprue Brothers, both will be charging me then the same tax as it's based on where I live and they have to pay Uncle Sam at tax time. Oh what fun

Peter

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