Taxes buying out of state questions

[Anonymous Poster]

Hypethetical question, Jon Doe will be buying a new tractor from a dealer who is in his state, the dealer will be delivering the tractor to his home and the dealer say's he gets his tractors from another state and will not be charging sales tax on the tractor. Jon Doe will save about $900.00 in sales tax. Here is the big question, will he have to pay taxes anyway. Here is another BIG question, say Jon Doe pays $16,000 cash for the tractor will that get people coming after him because of a purchase over $10,000. with cash involved? When the tractor and warranty goes in his name will that leave a trail for tax man to sniff him out?

 

[msocko3]

I may be wrong but here it goes. The way I see it is the dealer has a presence within the state of purchase, it makes no difference where the tractor comes from, the dealer is within the state it was purchased and delivered. So you would be responsible for paying state sales tax, at least this is how it would work in the state of Ohio (My home state). As for paying over $10,000 cash there shouldn't be any problem, I know folks that write checks for brand new Corvettes with out batting an eyelash. I think the long and short of it is, if you want to pay cash you should have no problems, if you want to avoid state sales tax, I think you are out of luck.

 

[Anonymous Poster]

The state tax depends upon your state, here in Virginia you can claim a "farm exemption" and avoid the sales tax. On the issue of paying cash - if the transaction is cash (individual $1 bills, not a check) and exceeds $10,000, there is a form that must be completed by the dealer. This is to catch money laundry operations, etc. The form is required for any cash transaction, whether depositing in an account or purchase. I have heard of the trick of purchasing certified checks, money orders and like instruments in less than $10K demonations and using them for a purchase over $10K. If the money is legal, just deposit it in the bank, complete the form, and pay by check.

 

[huckflynn]

If I didn't trust the answers I was getting from my dealer, I don't think I'd be trusting anything I'd be getting from my dealer, including but not limited to the tractor itself and the service after the sale.

Huck

 

[ejb]

You want to buy a tractor and pay for it with a brown paper bag full of cash?..what exactly are you cultivating with that rig?/w3tcompact/icons/wink.gif

 

[hayden]

As stated by another poster, if the dealer is doing business in your state and there is an applicable sales tax, he's supposed to collect it you have to pay it. The only legal ways to bypass sales taxes are to buy out-of-state from someone who does not have a place of business in your state, or live in a state that does not have a sales tax.

Whether or not you will get caught is a different question, and you'll have to figure that one out on your own.

 

[chuckp]

Texas also has a farm exemption. No sales tax. /w3tcompact/icons/cool.gif

Chuck

 

[Billc]

As to your question about paying taxes: If you buy from a dealer in your state he will collect the state sales tax and be responsible for sending it to your state's dept. of revenue. If you buy out of state then the dealer is not required to collect the state (your state) sales tax and send it in. However, you are responsible for sending the appropriate amount of tax to your State's revenue department. (This way your state's representatives will have money that they can dole out as they see fit to insure his/her re-election and continued culmination of power.)

Know this, most folks don't send in the appropriate tax. However, as more and more people buy through the internet, states will see a drop in tax revenue. More than likely the states will get together and come up with a system that solves this "problem". Currently, there is a push to have a federal tax on internet purchases. Once collected the federal government will send the appropriate amount of tax revenue back to the states...after taking their (the fed gov.) percentage of the sales tax.

As to the $10,000 notification rule, I'll double check on this today, but I think a bank has to inform the federal government whenever an amount of $10,000 or more passes through a customer's account...whether it be in the form of cash, check, electronic transfer, etc. it gets reported to the federal government. I'm a real estate investor and work with amounts over $10,000 regularly. Don't much like this rule.

Under the guise of seaching for drug money we all get checked. So much for the Bill of Rights.

Sorry, fellas, guess I've been watching and reading too much election material. I hate not being able to vote "for" someone, rather, I have to vote against someone.

 

[Richard]

A touch more illumination on the $10,000 passing through your account. In my business (stocks/bonds) that is cumulative for the year. If you bring me "cash" (we don't allow that actually) of say $5,000 I have to note that. Four months later, if you bring me another $5,000 cash... wham /w3tcompact/icons/shocked.gif I have to fill out the IRS form. /w3tcompact/icons/mad.gif

Upshot, it isn't a singular passage of 10k in greenbacks, it's a cumulative passage. Since it's never happend to me, I don't know if it is per calander year (doubt it) or rolling year (probably)

 

[Anonymous Poster]

The dealer says he doesn't charge tax because he works out of state and will purchase the tractor out of state and deliver it to the door.