Tax Mistake

[tdenny]

I can't imagine ANY states like the tax exemption from internet sales. In fact I doubt that any of the states like any sort of exemption from any taxes period. Especially here in the great state of Washington.

Although it may be illegal to avoid paying the taxes on a tractor purchased out of state I think it is a darn fine way to make up for the fact that we are taxed well beyond any reasonable amount already. Just my 2 cents.

 

[cowboydoc]

I couldn't agree with you more TD. They just keep spending more and more and coming up with more and more ways to tax us. This was NOT what the founding fathers had in mind!!

 

[tdenny]

Amen Richard.

Out here the voting public surprisingly (very liberal usually) keeps letting our government know that enough is enough but they for some reason just aren't getting the message. The voters have passed initiatives limiting the amount of property taxes, excise taxes, etc. and the governement fought them in the state supreme court and they were ruled unconstitutional. Nothing like being a representative of the people.

 

[Egon]

Seems like a lot of folks figure they are having to pay way too much tax. Is it time for another TEA PARTY?
Egon

 

[Phred]

Eugene,

Your right in principle they are not connected.

However, I think you will find that many states will likely use federal guidelines to determine if you are a real farm or if you are a hobby farm.

For example if you signed the ag exception form in Ark when you bought a tractor but did not show a schedule F on your state and federal forms then Ark would likely question the ag exception.

Fred

 

[Phred]

Chris,

I don't think so.

At first this statment would seem to indicate that it is:
"The term “agricultural” means operations engaged in for the production of food,
fiber, timber, sod, and nurseryman products."

However, if you look at the details under the sales tax law:
".......
4. An implement may not be treated as tax exempt unless it is used "directly" in the
agricultural production of food or fiber as a business. The term "directly" limits the
exemption to:
a. only those implements used in the actual agricultural production of food or
fiber to be sold in processed form or otherwise at retail, or
b. machinery and equipment used in the agricultural production of farm products
to be fed to livestock or poultry which is to be sold ultimately in processed
form at retail.
5. Implements which are not exempt include but are not limited to the following:
a. Containers or storage facilities.
b. Implements used in the production or severance of timber, or any motor
vehicle of a type subject to registration for use on the highway, or airplanes, or
hand tools........."

You can find more than you want to read at
<A target="_blank" HREF=http://www.state.ar.us/dfa/taxes/salestax/ar-regs05-2001.pdf>http://www.state.ar.us/dfa/taxes/salestax/ar-regs05-2001.pdf</A>
page 66 is the key area for this discussion.

But again don't take my word for it, talk to a CPA.

Fred

 

[cstocks]

Thanks for the info, Phred and especially for the link. I have looked for information about this topic on the internet before but have had little luck.

 

[TerryinMD]

Oh heck... let's spice up the conversation!! /w3tcompact/icons/eyes.gif

I'd take a look at when that law was written. 25 or 6 to 4, my guess it was put into effect when Clinton was the Gubner of Arkansas..... /w3tcompact/icons/laugh.gif/w3tcompact/icons/laugh.gif/w3tcompact/icons/laugh.gif

Just look at the language and the vagueness..... ack!!!

Terry

 

[Phred]

Terry,

Clinton is not from Arkansas he is from Harlem!!!!/w3tcompact/icons/laugh.gif

Thank god./w3tcompact/icons/smile.gif

Fred

 

[Hydraman]

Shoulda botta tractor in Montana!!! They have NO state sales tax; and they like it thatta way!!! I like it ,too; 'cause only being 50 miles away, it makes it real nice to go there and use their roads and services and whatever else all free of charge is very considerate of them!! Also gives me some leverage when negotiating with dealers here; I.E. " Why should I buy from you' when I can buy in Montana for xxx no. of dollars and no tax; but you want me to pay you this same amt. plus the 5% for the guvner!! I don't think so!!"Gotta go, bye

 

[DougM]

Is it possable to buy in a non taxing state and have it
delivered by a dealer in your state?

Doug

 

[DUMBDOG]

Sure, that is possible, but that does not relieve you of the tax liability. The tax is based on your home state liability not the purchase state.

 

[Hydraman]

Sure, just go to the non- taxing state, pay cash for the item, then haul it home-- nobody but you and the seller knows nuttin' about it!! bye bye

 

[tdenny]

Hydraman,

I was told by my a Kubota dealer in my neighboring state (Oregon - no sales tax) that my own state (Wa) checks warranty registrations of neighboring states to look for large interstate purchases. Of course you could always register your warranty at that state if you were to have a relative or some usable address.

 

[Earnsfan]

I agree, Pay now and quit worring about it

 

[Haz]

My neighbor works as a state tax auditor in Pennsylvania and he says that the state is really working on collecting sales tax especially for small businesses that order supplies out of state to try to save sales tax. The state auditors are trying to milk what they can out of the existing laws to bring in extra money. It is a whole lot better for them politically than to increase the state income tax. Interestingly there is a strong move in our state congress to get rid of property taxes, since it is a real strain on retired folks on a fixed income (i.e. social security) to pay high property tax rates especially in counties like ours which are having a very high growth rate and need new schools.

 

[chim]

Yup. I've seen Rendoofus on the TV telling us the State would have to pick up more of the costs of the public schools. Last time I checked, the State of PA wasn't printing their own money. We were still picking up the tab. Like any other government entity, the schools are living outside their budgets, and taxes will increase. Paying the State in lieu of the County is no gain for the overtaxed citizens, senior or otherwise................chim

 

[Buster57]

To ALL,
"In the future do … to avoid state tax" can get you in a lot of trouble. Never advise some one on the Internet how to accomplish a crime or you are guilty of a Felony!
Coming from Oregon-where there is no sales tax, there are too many examples of people getting in trouble giving tax advice.
Advice on how to cheat on income tax will always pi- - off the government.
Be careful and use your brain!

 

[Hydraman]

Yeah, you are probably right. I know that here in North Dakota, the politicos have tried to figure out ways to collect tax on TV markets, internet sales, and whatever else they can, but, haven't come up with anything effective. Here, when a dealer is licensed from the state, he is made the official "tax collector" ,if you will. He has to report all taxable sales to the tax dep't, and pay the appropriate amount; which he has collected. As far as jurisdiction is concerned, no state can go to a neighboring state and check their files, except by mutual aggreement. I guess that here they don't get too aggressive on out of state purchases. On auto's; when you buy the license plate, they ding you for the tax then, if it was an out of state purchase. On anything else that you have to 'register' with the state; the same probably applies. In order to go any further, they would have to be able to chase down every purchase one made out of state; and would probably get to the point where it was not 'cost effective'.
Also, here ; the towns and counties have gotten in on the bandwagon and are charging a 1% tax above the state tax; so if I drive to say Bismarck and buy something, I pay their tax; and get zip for return. So by their own greed, they push me to out of state purchases. Also , let me clarify, that I don't mind paying the tax to the state; but I can use it for leverage when negotiating a sale price with a local dealer. In other words; if a dealer in MT will sell an item for $1500 , then I can go the local dealer and maybe talk him down to $1425 plus the $75 for the guvner. Then it's a done deal. There are also times when I can buy the item, and pay the tax, cheaper than I can buy it w/o tax in MT. Guess where I go then. Bottom line-- what costs me the least!!

 

[tld]

About 5 years ago my wife and I bought a table from a furniture outlet in N.C. It was all done over the phone and delivered to my door. About 3 months later I get a letter from the State of Florida saying I owed the tax. No finance, just a credit card deal. Go figure.