In state vs out of state

[CMV]

Still keep thinking about upgrading to something a little larger....I like my little LS tractor, but larger bucket, more lift capacity, more HP, and higher dump clearance would make a lot of what I do much faster/easier. Looking at used (Kubota) and have a hard time justifying used over new since used prices aren't that much off for a real low hr machine. Looks like biggest difference is the Kubota insurance (if financed thru them) and state tax.

Just got a quote from out of state dealer and he said I wouldn't pay sales tax (at least not in SC - and I assume never in NC since there's no kind of title/registration). So is buying out of state - a good idea to save roughly ~$1800 sales tax?

Assuming my two local dealers (in state) are real close in quote but then adding sales tax, would there be a real good reason not to go a few hrs away for the initial purchase?

 

[CMV]

Maybe moot point......local dealer just told me to apply for farm exemption and have 0 sales tax in state. And his quote was a little better

Will look into that....from way he described you just have to have a plan to generate $3k in income within next 3 years - not be generating that much farm income right now. I doubt I will generate any, but sounds like worst case is the exemption expires after 3 yrs and they don't then go back to recoup taxes because you failed to generate the $3k in income.... Will research that some more - sounds like there's a catch....

 

[Oaktree]

My state has no sales tax, so it's not something I have to deal with but it is my understanding that you are still legally obligated to pay the sales tax on an out-of-state purchase if you live in a state that has one. Some states are quite aggressive about enforcing this, as my brother-in-law learned the hard way.

As far as your farm exemption goes, sounds like your plan might constitute fraud. Up to you to decide if the risk is worth the savings.

 

[Jstpssng]

As Oaktree said, and his BIL probably lives across the border in my state. I just happen to be filing out my tax form, and was calculating my sales tax when I took a break and read your post. Here is how our rules read;

Line 30. If you purchased items for use in Maine from retailers who did
not collect the Maine sales tax (such as businesses in other states and
many mail order and internet sellers), you may owe Maine use tax on
those items. The tax rate for purchases in 2017 is 5.5%. If you paid
another state’s sales or use tax on any purchase, that amount may be
credited against the Maine use tax due on that purchase. If you do not
know the exact amount of Maine use tax that you owe, either multiply
your Maine adjusted gross income from line 16 by .08% (.0008) or use
the table below. NOTE: For items that cost $1,000 or more, you must
add the tax on those items to the percentage or table amount. Use tax
on items that cost more than $5,000 must be reported on an individual
use tax return by the 15th day of the month following its purchase

 

[Peter 315]

People from MA come to NH all the time for no sales tax . I would take the dealers name sticker off and not tell anybody where you got it, 2k is a lot of money

 

[newbury]

People from MA come to NH all the time for no sales tax . I would take the dealers name sticker off and not tell anybody where you got it, 2k is a lot of money

Modern ethics at work.

 

[EddieWalker]

For years I always felt it was most important to buy from a local dealer so you got the best support possible. But with the internet becoming better and better at getting parts, I'm now thinking that local dealerships are going to be a thing of the past. I can go to Kubota and order parts for my Landpride mower and wait for them to be delivered there, then wait for them to call me, and then find time to go pick them up and pay what they charge, or I can order them online and have them delivered to my house in less time, and less money.

All of my tractors are now too old for dealer support. If something breaks, I'm wasting my time trying to get my dealer to find the parts. I've spent that time finding specialty shops that focus on that repair, or I'll order it online and repair it myself. My latest example was a wiring issue with my 2003 tractor that I bought brand new. The parts for it just don't exist any more, so anything that I need for it, I have to find a substitute. I completely took out all the wiring and then ran all new wiring and switches and fuse blocks without any safety devises except the clutch has to be in to start it. I no longer have any lights, or a horn on it. The new key is better too. Problem solved.

So if there was a good deal on a tractor that I liked that happened to be in another state, I wouldn't hesitate to buy it over a local one. I think price is now the most important factor when buying a tractor.

 

[Piston]

I would purchase out of state if it saved me a couple grand.

However, I don’t see any need to be close to a dealer either. A lot of people recommend buying based of dealer experience, but I don’t agree with that.

If I were you I’d build the exact tractor you want online, then get similar quotes from other dealers, and go with your favorite.

Don’t forget to check with Messicks, I was pleasantly surprised with their prices when I was comparing (including delivery).

 

[CMV]

Modern ethics at work.

True....in NC, it's pretty much on the "honor system"....you report your purchases and then pay the tax on them. I give this state more than my fair share of $$$ with their graduated income tax, annual vehicle tax, 7%+ sales tax, etc. Property taxes in 2 counties, etc.

They go as far as wanting you to report (on yourself) private purchases (used) for things like tractors, trailers, heavy equipment, etc - anything not registered or titled - so you can then pay personal property tax on it annually. Anything titled like vehicles, annual registration trailers, RVs, boats, etc are taxed every year - in addition to at initial purchase.

Does that make me right/wrong/lacking character/bad Christian/etc for trying to avoid an ~$1800 additional tax hit - and then 3% per yer indefinitely? Maybe so, but will take an ambien if it keeps me up at night

My argument to those who would attack my character for avoiding this (and maybe rightfully so - don't like the law, work to change it, don't skirt it...I get that...), but do you report your private purchases to your state gov't and then pay taxes on things you buy second hand? or barter for? Do you report every $1 (or other compensation) earned when a neighbor gives you a couple bucks for doing some work on their property for them? NOt saying you're right/wrong - just answer that of yourself prior to hurling stones my direction

 

[CMV]

...
Don't forget to check with Messicks, I was pleasantly surprised with their prices when I was comparing (including delivery).

Hadn't thought of that! I would assume overcoming trucking the thing ~450 miles away would negate any lower price quote advantage, but worth looking into. Been extremely happy with the few odd parts I bought from them online and really like watching Neal's videos. Supporting them with a new tractor purchase is a great idea. Although since I wouldn't be able to use them for any type of service after the sale, not sure it would be worth their time or effort to work up a very competitive quote - selling at super low margin and then just the occasional online filter set afterward .... they may as well just sell the machine to someone local for more $ or who will be paying their service dept later?

But wouldn't hurt to ask....

Most likely will trade my little LS in to make the deal. Sight unseen trade in value estimates are roughly $1500-$2000 less than I think I can get it sold for on CL. While that's a lot - esp since I'm balking at $1800ish tax - might be worth not waiting for possibly months for it to sell on Clist, dealing with all the scammers, dealing with all the lowballers, people who arrange a time to see it and never show, tire kickers, etc. Also avoids either having 2 tractors for a while or 0 tractors for a while, depending on timing. But if I do a trade-in, that would also prevent a deal from so far away I have to have it shipped to me.