New Sales Tax Rules

[pepeguitarra]

In a way, it is bringing everyone on the level. Brick and mortars are closing and going down because they failed to use the Internet. Some people to the brick and mortar store to check the items and order it cheaper on line. Not fair.

[Bob Salomon]

Bob:

You may not like this answer, and this is part of the complexities that the Supreme Court addressed by talking about the simplicities of South Dakota. Both WA & CA law is complex, and they use a concept of "nexus" (which is when you have legal presence in a state, and nexus for tax purposes can be different than nexus to be able to sue...), but when you are in a state for more that a certain # of days training, you have Sales Tax nexus. I'm guessing that Wayfair did not change this. Wayfair was not about physical presence in a state; rather it was about when can a state force an out-of-state company, with no nexus, to collect tax.

Although I'm semi-retired and only taking on new clients "for a good reason," this is why I always referred Sales Tax issues to CPAs that only handle Sales Tax. It's very specialized.

Mike, most of my trips into WA were for only 2 or 3 days, unless there was a trade show like the old IPOSA show then 2 more days or so were added for set up, take down and recovery.

But WA specifically told us that they were not charging us for any type us sales tax. They called it a business and occupation tax.

My brother is a Chairman of a major DC law firm and he had one of his tax attorneys check and my daughter is a JD/MBA and she checked and all said that we did not have liability but to fight it would just be far too much.
Had they been charging all photo distributors or luggage distributors this tax the PMA or the TGA (Photo Marketing Association and the Travel Goods Association) would have fought it as a group. But there just not enough of us for them to get involved.

Similar thing happened to us in CA. A city of LA inspector went into a Samy’s store in LA and saw one of our light boxes. These had DIN compliant stickers and all electrical parts carried UL certification. But the City of LA decided that the specific box they looked at had to have a City of LA electrical sticker and to get that we needed to send them one for testing, schematics and had to buy LA stickers. The inspection and certification had to be renewed yearly and was very expensive!
However there were 5 different size boxes in this product series but only one had to be tested yearly.
After 8 or so years they finally told us that inspection was only required if there were any changes to the product and we only had to buy their sticker yearly.

This meant that beside sending a new unit to them for testing, paying the return shipping, paying their fees and charges, getting a uni5 back that could no longer be sold as new, our shipping department had to open every unit that we were shipping to LA county, unpack the unit, put the sticker on, repackage and then ship.

However, to remain competitive, we could not charge more for that unit shipping to a dealer in LA county and had to eat the expenses.

[faberryman]

In a way, it is bringing everyone on the level. Brick and mortars are closing and going down because they failed to use the Internet. Some people to the brick and mortar store to check the items and order it cheaper on line. Not fair.

I have a local brick and mortar shop and I never go there. It has nothing to do with price and everything to do with them not carrying the items I want to buy, and when they have what I want to buy, not having it in stock.

[Vaughn]

..If I was an artist I give up photography. For what I pay in sales tax on a few hundred dollar purchase, I could draw for a year or two. ...

I would say the opposite. An artist may scream about the tax, but s/he would pay it in order to make art.

[Drew Wiley]

Just get a resale permit. It exempts materials that go into the finished product that is being sold from taxation. This would include things like printing paper and ink, matboard, framing supplies etc, but not film, chemistry, or equipment. In turn, you are expected to collect appropriate taxes from whom you sell your artwork to, and remit these. Of course, specific state laws apply, so sorting this all out going forward might get a little complicated. And Bob, there is really no such thing as "we pay the sales tax". That is just a marketing gimmick by which certain stores temporarily reduce the price of something an equivalent percent, which is generally a lot smaller amount than during a normal sale. The sales tax still has to be factored.

[HMG]

BH started charging me on Jan 3, 2019. CA is late.

If I was an artist I give up photography. For what I pay in sales tax on a few hundred dollar purchase, I could draw for a year or two. You have to be rich to do photography with no concerns for $$ nowadays. I had put a little order together for BH the other day. Sales tax was about $16. I canceled order, will wait and make due. Brits got to pay 20% VAT, poor Brits, feel sorry for em.

You can't draw conclusions about a specific tax rate without understanding the overall tax burden as well as the services provided. Those Brits may or may not be paying as much in income and property taxes as we do in the US. And I suspect those Brits aren't complaining about the VAT when they're walking out of the hospital without a bill. (Well, they probably are but shouldn't.)

[pendennis]

That may be true, but dealers still do it. And not all on the same days in the same areas.
Many times these tax free sales are run at trade shows.

For a lot of folks at trade shows and gun shows, the dealers will sell something to you at a "bottom line" price. The dealer will remit the sales tax amount due, based on the total revenue for the show. For instance, if you paid $1000 for a camera and the state sales tax rate is 6%, the dealer will remit $60 dollars to the state, and his gross profit after sales tax remittance is $940. It just simplifies the bookkeeping, and keeps the state tax auditors happy when they audit dealers at the shows; and they do random audits.

When you go to a store, the seller breaks out the tax on the register receipt, and the dealer remits the amount of sales tax computed in the cash register. I used to do tax returns for several businesses, and the state auditors usually accepted the register "tape" amount of tax compared to the total sales.

[Bob Salomon]

For a lot of folks at trade shows and gun shows, the dealers will sell something to you at a "bottom line" price. The dealer will remit the sales tax amount due, based on the total revenue for the show. For instance, if you paid $1000 for a camera and the state sales tax rate is 6%, the dealer will remit $60 dollars to the state, and his gross profit after sales tax remittance is $940. It just simplifies the bookkeeping, and keeps the state tax auditors happy when they audit dealers at the shows; and they do random audits.

When you go to a store, the seller breaks out the tax on the register receipt, and the dealer remits the amount of sales tax computed in the cash register. I used to do tax returns for several businesses, and the state auditors usually accepted the register "tape" amount of tax compared to the total sales.

The dealer has large signs in their booths stating Tax Free Sale or We Pay the Tax.

[BrianShaw]

I don’t mind paying the sales taxes I’m obligated to pay... and totally bewildered by the notion that others feel it’s such a travesty to do so as well.

[Greg Davis]

I can only talk about Kentucky since the new laws went into effect after I left FL, but technically we were supposed to pay any sales tax for out of state internet purchases on our annual tax filing. I am unaware of anyone that actually marked the box “yes” on their state tax form when asked if they bought something online. The new tax laws just guarantees we pay by putting the responsibility onto the retailer to charge sales tax instead of trusting people to pay it once a year when they filed their income taxes.