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Thread: Tax Day Cometh

  1. #1

    Smile Tax Day Cometh

    Do you have to pay tax on a mandolin bought online out of state?

  2. #2
    My Florida is scooped pheffernan's Avatar
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    Default Re: Tax Day Cometh

    Depends on the state.
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    Registered User sblock's Avatar
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    Default Re: Tax Day Cometh

    If you happen to live in California, then yes, you do. You have suppressed all information about yourself in your profile on the MC, so we can't advise you further unless you're willing to tell us more about you!

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    Moderator MikeEdgerton's Avatar
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    Default Re: Tax Day Cometh

    This article is a year old. More states may have been added. I doubt any went away.
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  5. #5

    Default Re: Tax Day Cometh

    Almost everything I buy out of state charges sales tax, though there are exceptions. I bought an Eastman MD505 from The Mandolin Store in January and they did not charge sales tax. However, my state, Indiana, has a line on my state income tax form where I am supposed to admit to any untaxed out of state purchases and pay any owed taxes. When I file 2021 taxes next year I will need to deal with that.

    Some online vendors will state on their site "No sales tax for shipments outside of (the store's state). But, as I said above, Indiana doesn't think that lets me off the hook.

  6. #6
    coprolite mandroid's Avatar
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    Default Re: Tax Day Cometh

    Oregon. No Sales Tax..
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  7. #7

    Default Re: Tax Day Cometh

    Thanks everyone. i did get a mandolin from the Mandolin Store in Tennessee. I live in Wisconsin. I will have to figure that out then!

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    Default Re: Tax Day Cometh

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    Last edited by Mandolin Cafe; Sep-27-2021 at 4:39pm.

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    Registered User Simon DS's Avatar
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    Default Re: Tax Day Cometh

    Not sure about the US but in many countries if your income is below a certain amount then there can be exemptions. Maybe luxury items would have no exemptions.

    Youíd just have to convince the taxman that your mandolin is a life necessity...

  10. #10
    Registered User sblock's Avatar
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    Default Re: Tax Day Cometh

    Quote Originally Posted by Simon DS View Post
    Not sure about the US but in many countries if your income is below a certain amount then there can be exemptions. Maybe luxury items would have no exemptions.

    You’d just have to convince the taxman that your mandolin is a life necessity...
    Sorry, but there are no exemptions in the U.S. states from sales tax if your income is below a given level.

  11. #11
    Fingertips of leather Bill McCall's Avatar
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    Default Re: Tax Day Cometh

    Quote Originally Posted by sblock View Post
    Sorry, but there are no exemptions in the U.S. states from sales tax if your income is below a given level.
    As noted above, there are a very few states that have no sales tax. In my receiving state, I typically pay no sales tax on internet purchases but I would suspect the some states would tax those even if shipped elsewhere. It all depends.
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    Default Re: Tax Day Cometh

    Quote Originally Posted by JohnMars View Post
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    Last edited by Mandolin Cafe; Sep-27-2021 at 4:38pm.
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    Registered User Simon DS's Avatar
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    Default Re: Tax Day Cometh

    Quote Originally Posted by sblock View Post
    Sorry, but there are no exemptions in the U.S. states from sales tax if your income is below a given level.
    That makes sense, it would be very difficult to enforce.

    Minstrelle, are you a diplomat? Or a member of a foreign mission? They list some States here too, it may be that these States are more lenient in some way.
    https://www.state.gov/sales-tax-exemption/

  14. #14
    two t's and one hyphen fatt-dad's Avatar
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    Default Re: Tax Day Cometh

    according to your question, the answer has always been, "Yes." Whether the retailer withheld it never meant one didn't, "Have," to, that is. . .

    Now there is the big push to make the withholding mandated across the internet.

    That's how I see it.

    No, I never volunteered when it wasn't withheld.

    Just how I've always understood the law.

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  15. #15

    Default Re: Tax Day Cometh

    My understanding is that businesses of a certain size/income/transactions (something) are now required to withhold and send in the state sales tax. This happened last year when the big places like Musicians Friend, Sweetwater, et al, all started charging/adding/withholding sales tax, reporting and sending it to the states.

    Some smaller operations are exempt, but it depends on your state whether you are required to report. I would assume in almost all cases you are supposed to, but doubtful if most do, because, at least historically, there was zero risk [i.e., in not reporting/paying it yourself]. I do not know if that is still the case. If you're paranoid, deal with places that withhold taxes. Maybe you can negotiate it out of the price. (Probably not in the current mandolin market, but worth an ask.) I'd might still lean toward a smaller place if it was a big ticket item, given a choice, but "big ticket item" is not a worry for me right now .
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    Professional Dreamer journeybear's Avatar
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    Default Re: Tax Day Cometh

    Back in February I bought a 1916 Gibson A-4 via an online auction held in Virginia. Neither that state nor Florida, my state of residence, are on the list of states Mike provided. I was charged tax on this (and a buyer's premium as well, which is another matter - buyers, beware!). Perhaps I don't understand all this - entirely possible - but it has raised some doubts. PS: That list was updated 7/15/21, so it's current.
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  17. #17

    Default Re: Tax Day Cometh

    Quote Originally Posted by journeybear View Post
    Back in February I bought a 1916 Gibson A-4 via an online auction held in Virginia. Neither that state nor Florida, my state of residence, are on the list of states Mike provided. I was charged tax on this (and a buyer's premium as well, which is another matter - buyers, beware!). Perhaps I don't understand all this - entirely possible - but it has raised some doubts. PS: That list was updated 7/15/21, so it's current.
    Did you have the mandolin held there in VA? If so then they would have to charge you VA state tax as the mandolin was not shipped out of state.
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  18. #18
    Professional Dreamer journeybear's Avatar
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    Default Re: Tax Day Cometh

    Hmmm ... Yes and no. I had them hold it at the auction house while I sorted out shipping arrangements, ended up being about a week. Settled on UPS. But the tax appeared on the invoice, which was generated the day after the auction.So I dunno ...
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  19. #19

    Default Re: Tax Day Cometh

    Quote Originally Posted by journeybear View Post
    Hmmm ... Yes and no. I had them hold it at the auction house while I sorted out shipping arrangements, ended up being about a week. Settled on UPS. But the tax appeared on the invoice, which was generated the day after the auction.So I dunno ...
    There’s your problem, if it wasn’t set up as an out-of-state shipment at the time of sale than it carries in-state obligations.
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  20. #20
    Professional Dreamer journeybear's Avatar
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    Default Re: Tax Day Cometh

    You sure? I think it was explained to me at the time that since the transaction took place in VA, I had to pay VA sales tax. It may have been an online auction, but it wasn't the same as an online purchase. I dunno. This might not be the same as what the OP asked about, and we may be muddying the waters.

    To be clear, I'm not complaining, even though the tax and buyer's premium added nearly 1/4 to the amount of my winning bid. So the final price wasn't quite as much of a bargain as I'd believed at the time. Still, I'm glad to have such a fine instrument in my entourage.
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  21. #21

    Default Re: Tax Day Cometh

    Quote Originally Posted by journeybear View Post
    You sure? I think it was explained to me at the time that since the transaction took place in VA, I had to pay VA sales tax. It may have been an online auction, but it wasn't the same as an online purchase. I dunno. This might not be the same as what the OP asked about, and we may be muddying the waters.

    To be clear, I'm not complaining, even though the tax and buyer's premium added nearly 1/4 to the amount of my winning bid. So the final price wasn't quite as much of a bargain as I'd believed at the time. Still, I'm glad to have such a fine instrument in my entourage.
    Yeah, I’m sure. Buying online and picking it up in the same state or having it shipped to the same state triggers automatic state tax. Just like buying something in person. Buying online and having it sent out of state puts that responsibility on you, in most cases, though that is changing now in some areas.
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  22. #22

    Default Re: Tax Day Cometh

    Quote Originally Posted by Minstrelle View Post
    Do you have to pay tax on a mandolin bought online out of state?
    It generally depends on where itís delivered. We live in a non sales tax state so we donít pay sales tax when I order something delivered to my address, when we ship something to my MIL who lives in a state that does charge tax we have to pay.

    There have been occasions when we are on vacation and buy something. If we have it shipped home we donít pay sales tax.
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    Default Re: Tax Day Cometh

    Quote Originally Posted by Minstrelle View Post
    Thanks everyone. i did get a mandolin from the Mandolin Store in Tennessee. I live in Wisconsin. I will have to figure that out then!
    In Wisconsin if you don't pay sales tax on something you are supposed to play use tax when you file your income tax. Most people don't, and I don't think it is enforced that much, but it is the law.
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    Registered User Scott Rucker's Avatar
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    Default Re: Tax Day Cometh

    Due to the US Supreme Court decision in South Dakota vs Wayfair, Inc. in 2018 more retailers are now legally required to collect tax on interstate sales than before the decision. Earlier federal case law dictated a different and more narrow definition of "nexus", a state's legal authority to impose taxes in light of the Commerce Clause in the US Constitution (which is the ultimate US law on interstate commerce). I won't bore you with the details but that is the end result. There are a lot of other variables, too, including whether or not a particular state changed its tax law(s) in light of the Wayfair decision and what each particular state's other sales and use tax laws are. In any case, the lack of taxing jurisdiction on a retailer resulting in a non-taxable transaction in interstate commerce is not a legal excuse for the purchaser to not pay the tax altogether on an otherwise taxable transaction. To the best of my (admittedly incomplete) knowledge, that is a purchaser's use tax obligation in every US state with sales and use tax laws on the books.

    It is impossible for me to be more specific due to the variability of sales/use tax laws from state to state and my lack of knowledge about each particular state's laws. Google "South Dakota vs Wayfair" for more information than you probably ever wanted about it. I would provide a link but am forbidden from favoring any for profit tax practitioner over another.

    Disclosure: I am a professional tax law administrator for a state taxing agency in the US. I am not representing my employer here. I just happen to have had regular updates while this case worked its way through the legal system and after the ultimate court decision.

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    Every day is a gift. Sheila Lagrand's Avatar
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    Default Re: Tax Day Cometh

    Quote Originally Posted by sblock View Post
    Sorry, but there are no exemptions in the U.S. states from sales tax if your income is below a given level.
    What happens if sales tax on out-of-state internet purchases is collected on income tax returns, and the individual's income falls below the minimum required to file an income tax return?
    Now, what was I after when I wandered in here?

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