PDA

View Full Version : Tax Savings


wheebil
07-14-2010, 11:00 PM
for those of you who live at or near a border state....consider purchasing your next big budget item (zero turn mower) from a bordering state. Advise the business you're from another state and typically they will not charge you sales tax...it is supposed to be your responsibility to report the purchase to your home state. Since z-turn mowers are not titled or registered, this is a way of saving several hundred dollars on a $8000 machine. I recently purchased a Bad Boy from Ohio and saved myself $525.00 in PA sales tax had I purchased it at a local dealer.

MOturkey
07-15-2010, 12:30 AM
Methinks there is something a little fishy about all this. I mean, according to your post, all I'd have to do when I'm in Alabama turkey hunting is tell them at Wal-Mart I'm from MO and they won't charge me sales tax on my purchases. That ain't gonna happen.

Now, I know there are some exceptions, such as internet or mail order sales, but I can't imagine a brick and mortar business not charging sales tax on a major purchase, with the exception of titled things like cars and trucks where the sales tax is collected before they can be licensed.

I may be wrong in all this, but the dealer would have to show some type of exemption for not charging the tax, if they show on their sales. Other states may be different, but here in MO, to my knowledge, the only purchases eligible for exemption are those purchased by a business for resale, and non-profits such as a church or school, and they actually have to show a letter of exemption or sales tax license. Certain agricultural purchases are also exempt.

topsites
07-15-2010, 12:58 AM
I'm not sure I would be discussing tax evasion in way of options unless
there exists a legitimate reason why you shouldn't have to pay it.

bradsd
07-15-2010, 01:17 AM
I had the opportunity to do this, I live on the KY, Ill border. A dealer just across the river offered to not charge me sales tax. I ended up buying from a KY dealer anyway, the Ill dealer let the mowers sit outside in the rain so no sale to me. Plus I would rather do the right thing and pay my fair share of taxes and not worry about it.

topsites
07-15-2010, 09:01 AM
I had the opportunity to do this, I live on the KY, Ill border. A dealer just across the river offered to not charge me sales tax.

Doesn't make it right but you didn't cross the border looking for that and I think that draws a line as well.

chad56
07-15-2010, 10:18 AM
for those of you who live at or near a border state....consider purchasing your next big budget item (zero turn mower) from a bordering state. Advise the business you're from another state and typically they will not charge you sales tax...it is supposed to be your responsibility to report the purchase to your home state. Since z-turn mowers are not titled or registered, this is a way of saving several hundred dollars on a $8000 machine. I recently purchased a Bad Boy from Ohio and saved myself $525.00 in PA sales tax had I purchased it at a local dealer.

He is right. We sell Scag, Blizzard plows, etc and if your out of state its on you to pay your own state tax. Due to the different rates or something like that. I sold some used mowers off craigs list and a guy came from michigan no tax plus sold a plow to a fellow in Indy same thing. We keep record on our end though to cover our butts for the IRS. I know our office girls follow the tax thing to a tee so if they say its good I'm ok with it.

JB1
07-15-2010, 11:40 AM
thats right you can do that and save money,BUT if and when the state you live in ever does a sales tax audit and when they check your records and see you have bought this equipment and didn't pay sales taxes on it, they now have you. Actually you just have to pay the tax then a penality. Trust me I know.

chad56
07-15-2010, 11:44 AM
not to mention your local dealer might not go out of his way when your in a pinch. You might get told to go back where you got and see if they can help. Not that we would turn down business but you get the idea.

fastlane
07-15-2010, 05:35 PM
Delaware has no sales tax. Too far away for me but someone closer could save some money.

Martinson9
07-16-2010, 12:12 AM
I would assume you are going to write off that mower as a business expense on your tax return? It will show up as an asset for your business on your tax return. If, and when, you get audited by your states department of revenue they are going to ask to see the invoice for that equipment. When you show it to them they are going to get you for the tax, interest and a penalty. If they see a pattern of you doing this it could be criminal too. In my state, if you don't have the receipt, you didn't pay the tax. I had to pay tax on a GPS I bought from Circuit City because I couldn't find the receipt.

For a couple hundred bucks of sales tax I'd rather be able to sleep well at night.

I agree with a previous poster, I'm not sure discussing and giving pointers on tax evasion is a good idea.

jherety
07-16-2010, 01:13 AM
Longtime lurker, thought I would register to offer my opinion on this matter.

When it comes to sales tax and out of state buyers, each state has different regulations on reporting. For example, an out of state buyer who comes to Kentucky to purchase an item is required to either pay KY sales tax on that item or have the dealer deliver the item across state line, collect 0 sales tax, and report the sale to the buyer's home state treasurer to ensure that appropriate taxes are paid. On the other hand, certain states such as TN will not collect sales tax on items that are delivered across state lines and are not required to report it to the buyer's home state.

Caveat to states that do not report; if the dealer is ever audited, there's a very good chance that the paperwork will catch up with you and you will have to pay sales tax and possibly penalties/interest.

Where I live, it's popular to go across the state line into TN to purchase ATV's, have them delivered to KY, and pay no sales tax. I know of a couple of individuals who did this, dealer in TN got audited, and they got a bill from the KY State Treasurer for the sales tax on a purchase they made 5-6 years ago. In this specific case, no interest/penalties were levied, but there could have been (in KY, ATV's are not titled so they are essentially the same thing as lawnmowers). However, for every 1 person who ends up eventually paying sales tax, I would guesstimate there to be many more individuals who squeeze by without incident.

However, if you buy in a non-reporting state with cash and have item delivered, what's to keep you from providing incorrect contact information? Nothing except your conscience.

Let me reiterate what has already been said: tax evasion is not good and a very good way to ruin a business, have assets seized, etc. I just wanted to give an idea of how some people game the system and how it comes back to bite occasionally.

Wes

Craig3
07-16-2010, 01:46 AM
in Oklahoma they refer to this as a "use tax". I bought an aerator from Virginia on ebay and was charged no sales tax, but I'll pay the OK equivalent when I file my taxes under the use tax category. When it comes to my business I'd rather go legit, small compromises can lead to big fines down the road....especially when the economy gets down and they need to collect all the money they can get their hands on

Roger
07-16-2010, 07:00 AM
....I recently purchased a Bad Boy from Ohio and saved myself $525.00 in PA sales tax had I purchased it at a local dealer.

PA has a "Use Tax." You see it every month when you file your sales tax collection. It is a line item on every e-tides form you supply online by the 20th of the month.

If you have not yet filed for June, you can include it it the June filing. If June has already been file, then add it to the July filing. You can easily clear up this matter on your e-tides filing.

Your thread title is misleading. There is no "tax savings." It is a only a matter of whether the in-state dealer collects and submits the tax money, or if you pay it through "Use Tax" on the e-tides form. Either way, you pay the tax, hence no "savings."

Richard Martin
07-16-2010, 07:22 AM
Try driving to MD or NC and trying that. If you don't have a tax ID number then you're paying sales tax.

AI Inc
10-28-2010, 07:24 AM
Here in NH there is no sales tax on anything ( or state income tax) . Every border city is mobed on weekends as people from mass, vt and Maine cross the state line to buy anything from there weekly groceries to boats , snowmobiles , 4 wheelers computers ect.

John_DeereGreen
10-28-2010, 07:53 AM
According to my dealer, since I'm a legal business charging and collecting sales tax, I am eligable to purchase equipment, parts, and supplies tax exempt. I haven't talked to my accountant about any of this, and I still pay sales tax, but according to them the option is there.

I'm in OH.

Richard Martin
10-28-2010, 08:40 AM
According to my dealer, since I'm a legal business charging and collecting sales tax, I am eligable to purchase equipment, parts, and supplies tax exempt. I haven't talked to my accountant about any of this, and I still pay sales tax, but according to them the option is there.

I'm in OH.

Your statement is a little confusing but...

You are only exempt from sales tax on items that you will be reselling and then collecting sales tax on. Don't get caught using your tax exempt number for personal or other business items.

In other words you can't go out and buy mowers, trimmers and other stuff for your lawn business and use your tax number to avoid paying sales taxes.

Fvstringpicker
10-28-2010, 01:17 PM
Typically, goods purchased out of state are not taxed in the state purchased, if, and only if, the goods are shipped via interstate commerce (emphasis added) and the vendor does not have an outlet in your state. If you buy equipment across state lines, you are no more exempt from sales tax in the state the equipment is purchased than I would be if I shopped at Walmart in another state. The exceptions are using a valid state tax ID number, shipping the goods via interstate commerce or state law in your state exempting such sales. If you get caught willfully avoiding a required "use tax" on such sales, you will more than likely pay a penalty (25% of the tax in GA) and interest in addition to the required tax. There can be a fraud penalty added equaling 50-100% of the tax. I strongly suggest you meet with your accountant ASAP.

DAR57
10-28-2010, 01:40 PM
Here is a way to help on your taxes too...................VOTE NEXT TUESDAY!!!!

Martinson9
10-28-2010, 01:43 PM
Here is a way to help on your taxes too...................VOTE NEXT TUESDAY!!!!

That would all depend on who you are voting for. I can think of lots of candidates that would NOT help on my taxes.

Fvstringpicker
10-28-2010, 09:35 PM
Few, if any, are going to help the average "you" with your taxes. (despite what they claim or worse, what you hope for.)

John_DeereGreen
10-29-2010, 08:23 AM
Your statement is a little confusing but...

You are only exempt from sales tax on items that you will be reselling and then collecting sales tax on. Don't get caught using your tax exempt number for personal or other business items.

In other words you can't go out and buy mowers, trimmers and other stuff for your lawn business and use your tax number to avoid paying sales taxes.

I know that I asked to see the tax exemption form, and one of the classes for tax exemption was something along the lines of "to be used in taxable resale, or in production of taxable goods."

snomaha
11-05-2010, 06:50 AM
in Oklahoma they refer to this as a "use tax". I bought an aerator from Virginia on ebay and was charged no sales tax, but I'll pay the OK equivalent when I file my taxes under the use tax category. When it comes to my business I'd rather go legit, small compromises can lead to big fines down the road....especially when the economy gets down and they need to collect all the money they can get their hands on

Use tax is a big thing the IRS is looking at now. In an audit they will ask for your depreciation schedule and then want supporting documentation on payment of sales tax.