Tax Day Cometh

[mbruno]

When I've bought my mandolins from an out of state retailer (AZ and TN) I've had them ship it back for me rather than take it with me right then and there. I'm not sure why, but doing it that way I wasn't required to pay sales tax on the purchase.

If you did take it home, then as I understand it you should have paid sales tax at the retailer - so you shouldn't have to worry about it on tax day really.

I'm not a tax advisor etc - so feel free to research more - but this is what the retailers suggested I do and I haven't had an issue personally.

[tjmangum]

My understanding is that there are sales dollar thresholds for a business selling to other states. If it's a small shop, they may not be required to comply. Apparently, it's different per state. https://www.salestaxinstitute.com/re...er-nexus-chart

[keith.rogers]

My understanding is that there are sales dollar thresholds for a business selling to other states. If it's a small shop, they may not be required to comply. Apparently, it's different per state. https://www.salestaxinstitute.com/re...er-nexus-chart

Each state's legal threshold might be different, but that doesn't necessarily mean the vendors are using those in their decision whether to tax sales. I'd guess some may simply decide, i.e., once they have to collect tax for even one out-of-state purchase, to do that for any state that assesses sales tax. I'm sure it keeps their accounting simpler, and avoids any chance of getting caught in some situation where they have to pay back taxes if a state retroactively changes the nexus definition, as did happen with California after the Wayfair decision.

[John Bertotti]

It seems there is a new law starting next year. Don't quote me on this but as I am recalling I think it says places like ebay and reverb will now be taxed for any sales of 600$ over the year. Now how accurate is that? Internet is full of garbage but this was being discussed elsewhere by guys and gals selling online.

[keith.rogers]

It seems there is a new law starting next year. Don't quote me on this but as I am recalling I think it says places like ebay and reverb will now be taxed for any sales of 600$ over the year. Now how accurate is that? Internet is full of garbage but this was being discussed elsewhere by guys and gals selling online.

I think the issue here is that they will report your sales (income) activity to the IRS over a certain level.

[Andy B]

Page 36 of the official transcript of the oral argument in the Supreme Court of the United States in the Wayfair case reflects that Justice Breyer asked Wayfair’s counsel the following question: “I mean, one part of the answer to that in my mind or, not an answer, but help resolve it, is what does it cost for a mandolin seller who sells mandolins on the Internet to sell them in 50 states? How much does it cost him to enter that market?” I wonder what inspired Justice Breyer to choose that particular hypothetical.

[journeybear]

I wonder what inspired Justice Breyer to choose that particular hypothetical.

If I had PhotoShop, this is where I would post an image I'd whipped up of Justice Breyer playing a mandolin, in his robe, of course.

I see this has all come up before, and no one could find actual proof of his mandolinning. ...

[alanruther]

It depends both on the state and the price. However, I can not give you any advice since what works for New York might not ultimately work for any other state. For example, taxes are charged for international packages only after they outprice the legal non-chargeable value. You could call the federal state tax office or create a paystub to see if any taxes will be paid for your parcel. I recommend the first option tho, as online stubs might not always be accurate. I made one once, and it was not entirely valid.

[Mandobar]

No matter what the dollar threshold and whether or not the store collected tax, you owe your state sales tax monies. Unless you live in a state that has no sales tax. If you paid it through the sale- great. You are covered. This is not a new law, just one that is being enforced now.

I bought three Calton cases from Canada years back. Did not pay the sales tax as it was not collected. A few years later the State of New Jersey, where I was living at the time sent me a Tax Court letter, via certified mail. They wanted the unpaid sales tax on that sale and a hefty fine and some interest. The fine and interest were four times the amount of the sales tax.

Maine has a tax amnesty program. Every year we pay an estimated amount for sales tax not paid on purchases out of state. It is a nominal fee, and in return for payment, we get amnesty for anything purchased that we might not have paid sales tax on.

And just so you know, following what a retailer says is ok is not a valid excuse in tax court, at either the state of federal level.

[Mandobart]

Oregon. No Sales Tax..

Washington. No state income tax. They will come asking for sales tax on any big ticket out of state purchase (vehicles, furniture, appliances). Most on-line companies automatically charge it on sales to WA. But there is no formal mechanism I know of to collect tax on an out of state instrument sale.

[Mandobart]

It seems there is a new law starting next year. Don't quote me on this but as I am recalling I think it says places like ebay and reverb will now be taxed for any sales of 600$ over the year. Now how accurate is that? Internet is full of garbage but this was being discussed elsewhere by guys and gals selling online.

IIRC from a radio interview with Michelle Singletary, on-line places like ebay, PayPal, venmo, etc. will report your payments to the IRS (and send you a 1099, probably electronically) if you get paid over $600 or have over 80 transactions in a year. This applies to sellers, not buyers and is about earnings you may need to claim on your federal return, not purchases you may owe state sales tax on.

[pops1]

In a lot of states if you don't pay sales tax on something you buy you are required to pay a use tax (the same thing) on those articles when you file your taxes.

[Dan in NH]

This is exactly why I bought my Eastman AC422CE online from Chicago Music Exchange rather that the "local" dealer an hour and a half from my house. My state doesn't have sales tax, but the store is in a state that does. That would have amounted to over $100 added to the price.