Buying tractor out of state (sales tax?)

[Roto]

If I buy a tractor in NH instead of Maine there is no sales tax but does the dealer send the info to the State of Maine so Maine will catch you and make you pay? i have heard that there is some law that the dealers have to submit something to the State in which live to let them know. Has anyone bought out of state with no sales tax and gotten away with it? Not that I would ever do such a thing but just to know in-case someone asks. (-:

Mike

 

[quicksandfarmer]

In Maine, you owe what's called "use tax" on anything you buy that you didn't pay sales tax on, which would be taxable if you bought it in Maine. So in answer to your question, "Has anyone bought out of state with no sales tax and gotten away with it? " if you've ever bought anything in a tax-free state and brought it home, or ever ordered anything over the Internet and not paid tax, then you've done it.

See http://www.maine.gov/revenue/salesuse/usetax.pdf for info.

As a practical matter, most use tax is collected from businesses, and most use tax from individuals is for big ticket items.

 

[Roto]

I know about the "use tax" and that your suppose to tell the state what you bought out of state but what kind of paper trail actually exists? Still doesnt answer my question on weather a dealer submits something to another state or not.

mike

 

[shaley]

This is the case in VA. As far as I know he doesn't submit anything. It is up to the user to file on their state tax return.

 

[jcotta]

State catches you two basic ways. If you finance, the dealer or finance company will a UCC filing in your state to secure the property. The state sales tax dept traces UCC filings to see if tax paid. The bigger dealers are registered in more than one state. Your home state audits dealer and makes list of out of state deliveries. Private sales usually stay private.

John

 

[Roto]

AHHHH I see, so if i am going to finance through NH then paperwork might catch up with me. Just wondering if anyone actually has done this and got caught or got away with it and financed through NH?

Mike

 

[1bush2hog]

If the out of state dealer shows delivery to your location he doesn't get nailed for the state sales taxes. The rest would be up to you. Some of the states have gotten alot smarter in auditing these types of purchases, not to say you would or would not get caught.

 

[Turbys_1700]

It's very difficult for the state to get use tax from stuff you've bought out of state if you are paying with cash. The stuff you buy with financing will be easier to track down. I've never bought a big ticket item out of state but buy some smaller stuff out of state through e-bay.

Here in NC and other states legislators are trying to get a handle on this problem. I've got a feeling that an internet use tax is on the horizon for just this type of issue. I don't see how they could catch out of state dealers unless they required them to submit a bill of sale. This could be on the horizon also.

Bottom line is that to be in accordance with most state laws you are required to claim any thing that you purchase out of state and then pay the use tax on those items. I don't like it but that's the way it is.

 

[daTeacha]

I think your legislature needs to become far more ag friendly. In Ohio there is no sales tax on stuff used for ag purposes. Tractors usually qualify in some way.

 

[Bob_Skurka]

AHHHH I see, so if i am going to finance through NH then paperwork might catch up with me. Just wondering if anyone actually has done this and got caught or got away with it and financed through NH?

Mike

You just need to finance your tractor to dramatically increase your risk of getting caught. It does not matter if you finance through the dealer, a bank, credit union, or whoever.

If you are buying from a neighboring state, one that borders your home state then the chances are even higher as many states have 'reciprocity' laws for big ticket purchases (furniture, tractors, business supplies, etc).

Realize also that it will take 1 to 3 years to get caught, the government doesn't usually work very quickly, and only will compare thing after the tax year is over. If caught, you will pay interest from the date of purchase. You will pay a penalty as well because this is considered tax evasion. If it can be shown that you knowingly purchased from out of state to avoid the sale tax then you will pay a hefty fine and you will be an audit target for many years to come.

Disclaimer, I am not a tax professional nor am I a lawyer. However I have been called in as an expert witness to tesitfy in Federal court cases as well as being called before various legislative bodies (multiple states, and jurisidictions) to testify about cross-state taxation and how it affects revenue and private business as well as buying patterns of individuals when there is a tax imbalance between states.
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