Replies

1. 
   HowardAcheson | Jan 13, 2004 01:48am | #1

   That's nothing unique or new. AFAIK, any state that has a sales tax has a companion use tax. The question is the enforcement.

1. 
   ChippingWood | Jan 13, 2004 02:10am | #2

   Ah. But isn't putting a line on the state tax form taking the enforcement and turning it up a notch or two?

2. 
   jvs | Jan 13, 2004 03:31am | #3

   Not sure what your point is. Regardless of the enforcement mechanisms, if the law says "pay taxes on this" and you don't, you are simply a tax cheat (and a bunch of other dirty names....). If you don't like sales taxes in general, move to Alaska, Delaware, New Hampshire, or another state that doesn't have them. I don't know of any state that exempts you from taxes on out-of-state purchases via "mail order" of any kind. The final price of tools depends a lot on where you live, not where you buy them from.

   My 4.5% (VA); take it for what you paid.

   /jvs

3. 
   Norse | Jan 13, 2004 02:50pm | #4

   If you are in business, many states exempt equipment used in the production (i.e. all your tools and supplies) from "Use" tax or sales tax at the time of purchase. Get a DBA, sell a few pieces a year and write it off.

   Norse

4. 
   GHR | Jan 13, 2004 08:20pm | #5

   All states with sales tax also have a use tax. The use tax may also include local sales taxes.

   All states with a use tax have a use tax form.

   Many states with a use tax now have a line on their income tax form for paying use tax.

   Oklahoma has 5 or 6 options on the income tax forms for declaring and computing use tax.

   Oklahoma has reinterpreted its sales/use tax laws so that delivered goods are subject to the tax rate at the point of delivery not the point of sale. Oklahoma publishs sales/use tax rates for all 9 digit zip codes in the state.

5. 
   joneill | Jan 13, 2004 09:15pm | #6

   Just think of of the money you could save on your 2004 taxes by "donating" all those pricey tools to me! Glad I could help.

6. 
   MajorWool | Jan 14, 2004 10:58am | #7

   This has been a hot topic for years. Enforcement is the key issue. IIRC, there was a landmark case where a state tried to get LL Bean to release their records of all merchandise shipped to that state but the ruling sided with Bean to keep their records confidential. For NJ, NY, and CT, they have an agreement between states that anything purchased in one of those states and shipped to the others is taxable. Also, if a company has a physical presence in a state, then they have to charge sales tax for all merchandise shipped into that state. So states that have outlet stores are now required to collect the appropriate tax on items shipped by the main store. It will be interesting to see if other states adopt the NY, NJ, CT method. I know that any state with a major mail order company presence will be reluctant to give up that competitive advantage.

   That being said, take a look at the borders of the states w/o sales tax. Delaware is a shopping center for the East Coast. Everytime we drove from Balmer to Philly we'd stop in DE to do a bunch of shopping. Look at the NH State liquor stores, especially the Exit 6 Rte 95 Store, which is bigger than your average Mega grocery store. They are simply reacting to the pressures exerted by Taxxachusetts. In the case of NH, Maine sent a bunch of state police down to take down license plate numbers of Maine residents buying liquor in NH. The NH governor had those agents arrested for causing a public scene or somesuch and now the Kittery, Maine and Portsmouth, NH liquor stores have comparable prices. Guess how many WA residents drive down I5 to do their shopping at Jantzen Beach in Oregon? This whole taxation (tax avoidance) issue is getting even more press with internet cigarette sales that avoid sales tax.

   Hmmmm, this is starting to sound like the late 1700's when a bunch of people got TO'd about unfair taxation. Makes me feel hopeful that people in this country still have some of the spunk that once made us great.

   Hint, cash transactions are a way to take care of annoying questions at audit time.

   CA is particularly evil though. We sold a summer house there last year and they kept 3-1/3% of the sales price as a tax withholding, so now I have to file a 6 page CA income tax return to get most of it back even though I am in no way shape or form a CA resident, and we didn't spend a single day there in 2003.

   Reminds me of the Monty Python sketch, where someone suggested they tax all foreigners living abroad. :(