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Will receive a tax bill for today's out of state purchase. True?

Posted by mudworm (My Page) on
Wed, Nov 7, 12 at 1:00

The question is not about whether we should pay tax for out of state purchases or not -- we here all know that we are supposed to pay voluntarily the use tax for purchases made out of state, don't we? ;)

The question is: is it true that we WILL receive a state tax bill someday (not sure when) for purchases we make today from out of state? Well, that's what the sales person at our local appliances store told me when the topic of online purchase came up (e.g. buying from AJ Madison). He says it could be next year or a few years down the road, but the bill will come. After all, Amazon has already started charging tax, so I wonder if what he said was true. Anyone knows?


Follow-Up Postings:

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RE: Will receive a tax bill for today's out of state purchase. Tr

I've yet to hear about anyone in my state being sent a tax bill. I don't think our revenue dept has the resources now to do so. I have read about, however, Bee and another member on the Appliance Forum receiving a bill after a untaxed purchase. (I think that Bee's wasn't an Internet purchase--just an out of state storefront.)

I think that we will see more states getting aggressive about this as the economy is still in the tank and states struggle for revenue. Back when I worked for my state's governor (now the US ambassador to China) in the late 90's-early 00's, he chaired the National Governors Association's committee on Internet taxation with the goal of seeing every state collect its tax due from every Internet purchase. I'm surprised that 10 years later we still aren't there.


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RE: Will receive a tax bill for today's out of state purchase. Tr

The issue for me is the local salesperson trying to scare you into buying from him. No matter what I would never go to that store again.

How would anyone know you purchased something out of state?


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RE: Will receive a tax bill for today's out of state purchase. Tr

Mudworm, I highly doubt it. As debrak said, how would the state know? It would need the out of state seller to be reporting the sales and if there's no reporting requirement now, there isn't going to be a reporting requirement several years down the line for purchases made now.

I'd be very curious about the bill Bee received and the states involved.

Do you live in New York State? If you do, your state income tax form has for the last few years had a line for use tax. Your choice is to either track all your out of state purchases all year and calculate the exact amount required OR to save that immense record keeping hassle (and the potential for audit if the state decides you weren't being completely forthright or accurate) and pay a fixed percentage of your income. I have no idea whether other states have similar provisions.

I also agree with debrak that I would avoid stores where sales people lie to you outright.


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RE: Will receive a tax bill for today's out of state purchase. Tr

PA had a court order for the appliance stores in DE to turn over all records for the previous 3 years. I just paid a tax bill for appliances bought for the last kitchen reno. Talk about annoying. The date of purchase for those was right at the statue of limitations, so I got that bill right away. Another neighbor from my old street also got one. We all shopped in DE, it was the closest high end store for appliances around that sold the products we were looking for.

This house, I did shop there again (before the tax bill issue mentioned above). I only bought my SZ fridge (a clearance item) and the SZ freezer drawers. Bought all the other stuff from a PA store because they carried the BS I wanted and had all the Mieles on sale. The DE store delivered my fridge & freezer to me. So, I'm waiting for the shoe to drop on that purchase.

The DE store did not charge sales tax to PA customers because they didn't have a store in PA. But now, they have changed their policy, if they are delivering the items you purchase in PA, they charge tax. If you pick up the items, then no record is kept of who the purchaser is. Kind of kills me because that reno in the old house we picked up our stuff, except the range.

Delaware is going to have to change it's slogan from "tax free shopping" to "tax free shopping, sorta".

I wonder what happened to some of the jewelry stores that are based in Philly and opened stores in DE to save the groom money by having tax-free diamonds....hmm

PA is hurting for money and they are doing whatever it takes to increase revenues, I guess. But paying taxes on the items I don't even own any more really got my goat.


-Bee


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RE: Will receive a tax bill for today's out of state purchase. Tr

I believe (but not certain) if you buy something in tax free NH but have it delivered in MA, you will pay MA sales tax on the item. If you pick it up you don't have to pay the tax. This has been my impression for 10+ years.


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RE: Will receive a tax bill for today's out of state purchase. Tr

ahh, delivery. We live on the border of two counties. For a while they had two different sales tax %s. You paid the tax where you picked it up unless you had it delivered and then you paid where it was delivered.

Thats crazy about PA going after a certain store for sales tax.


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RE: Will receive a tax bill for today's out of state purchase. Tr

Yes, sooner or later states will hunt you down. There is too much money involved for them to not do so. You could possibly get away with purchasing something out of state and not paying tax this time, but doing so IS coming, and coming fast. Technology is making it much much easier for states to be able to just send you the tax bill.


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RE: Will receive a tax bill for today's out of state purchase. Tr

I will not be surprised if some day California franchise board goes to AJMadison and asks them to turn over all the sales records for deliveries to CA residents.

We'll see. It appears that the local appliance store can get quite close to online pricing. I'm willing to pay a couple hundred more to buy locally.


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RE: Will receive a tax bill for today's out of state purchase. Tr

I got a tax bill from the out of state purchase of some fairly expensive leather furniture. The purchase was in Oct. of last year and the bill arrived in August of this year. There was not an option not to pay.


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RE: Will receive a tax bill for today's out of state purchase. Tr

Truth: you MAY receive a tax bill.

Lie: you WILL receive a tax bill.

As others have said, the sales person is a sleazeball!

It sounds like the worst that may happen is you have to pony up the tax one day. I have not heard of anyone being assessed a penalty so far. That said, it's probably technically possible for the state to assess interest etc.


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RE: Will receive a tax bill for today's out of state purchase. Tr

When I was buying my Blue Star I found an online dealer who would deliver it for free, no tax, and his price was a bit better than my local guy. I met the BS rep at at a cooking demo, he gave us his card, said to call if I had any questions. I reached out to him about this online guy. He told me if he knocked off 6% (the tax amount) on the range top would I buy locally from the dealer where he was doing the demo. That's how the local deal went down. So see if you can find out who the rep is that they use for your appliances and personally reach out to him/her and ask to have the price reduced by the amount of the tax (of course you are still paying tax but the price has been lowered to compensate for that). These manufacturer reps don't want you to buy through the internet and they will do what they have to do to get you to buy from their local store. Sometimes the store cannot lower the price, but the rep can give them the green light to do so.


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RE: Will receive a tax bill for today's out of state purchase. Tr

Interesting. California always asks you to pay your sales tax on out-of-state purchases on your income tax form. My reaction is always, "You gotta be #@&!#^@$ kidding me!" I don't keep track, and it's completely unreasonable for them to expect me to. If they can come up with a system that doesn't place and undue record-keeping burden on me, I will be happy to pay. But to ask me to remember, 3 months into the new year, not just what I purchased last year but where it came from (I'm not located where it's easy to travel out of state to shop; it's the internet shopping--I don't pay any attention to where the company is based), and you are not going to get anything more than a wild-a$$ guess. And $0 is as good a guess as any.


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RE: Will receive a tax bill for today's out of state purchase. Tr

I didn't know about this law, or that my state of Florida had it. Nearly a year after delivery, I got a bill from the state for the "use tax" including interest and penalty on a large appliance. They are spot-checking trucking companies receipts and are clearly going after expensive items. They didn't even know exactly what the item was--I have to supply an invoice and all the paperwork. I called, complained that I recently spent a long time in the county office becoming a state resident, paying auto transfer tax, etc. and never once did they tell me about my legal responsibilities here, when they could and should have.
They are clearly going after the lucrative stuff. For now, not books from Amazon. But that day will probably come.


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RE: Will receive a tax bill for today's out of state purchase. Tr

We are in the process of moving from Ohio to South Carolina. I buy a lot from Amazon, and do not pay Ohio sales tax (although, I guess theoretically we are supposed to?) However, I did have 2 of my Amazon purchases sent to our place in SC, and at the end of the year, I got a copy of a notice from Amazon, listing those two items, their value, and a notice saying that they were also required to send that information to the SC tax bureau, and a copy was being sent. Now, we didn't do anything last year because we weren't residents and didn't pay SC state taxes, but I'm not so sure about what will happen when we are.


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RE: Will receive a tax bill for today's out of state purchase. Tr

We are in the process of moving from Ohio to South Carolina. I buy a lot from Amazon, and do not pay Ohio sales tax (although, I guess theoretically we are supposed to?) However, I did have 2 of my Amazon purchases sent to our place in SC, and at the end of the year, I got a copy of a notice from Amazon, listing those two items, their value, and a notice saying that they were also required to send that information to the SC tax bureau, and a copy was being sent. Now, we didn't do anything last year because we weren't residents and didn't pay SC state taxes, but I'm not so sure about what will happen when we are.


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RE: Will receive a tax bill for today's out of state purchase. Tr

Here, in the DelMarVa area, (Del = Delaware) if you bought something out of state and had it sent you didn't pay sales tax.

Online, if a store has an outlet in your state, you pay tax.

I've never heard of a "use" tax.
Makes me glad I'm not doing big things right now. Something of which one should be aware!


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RE: Will receive a tax bill for today's out of state purchase. Tr

Yes, I believe it was true...there is a huge campaign in my state to "do the right thing" and pay your taxes for internet and out of state purchases for the last 6 years. If we don't pay, they will go after us. If we do pay what they "believe" we owe them we will not have to worry. They want 2% of our income for the last 6 years. I kid you not. My husband says "bring it on" and he is as nonconfrontational a person as you could ever meet. Oh yes, we did get a bill in the mail a few months ago that did go into file 13.


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RE: Will receive a tax bill for today's out of state purchase. Tr

Yes, I believe it was true...there is a huge campaign in my state to "do the right thing" and pay your taxes for internet and out of state purchases for the last 6 years. If we don't pay, they will go after us. If we do pay what they "believe" we owe them we will not have to worry. They want 2% of our income for the last 6 years. I kid you not. My husband says "bring it on" and he is as nonconfrontational a person as you could ever meet. Oh yes, we did get a bill in the mail a few months ago that did go into file 13.


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RE: Will receive a tax bill for today's out of state purchase. Tr

I agree with everyone. There is a chance you may receive a tax notice, but definitely not a surety. What state are you in?

It sounds more to me like the stories that many local dealers tell about the time they tried to get something from an online dealer (since their stock was low or some other bs reason) and it sat on a truck and took three months to get to the customer, blah blah blah. Strange coincidence that when a company has a very low percentage of negative reviews that such a high percentage of applicance salesman have had bad experiences right? These stories are all to convince you that it's worth paying hundreds or thousands more to go with them. In all honesty if a local place can match the online price no matter the item, I will always be willing to pay the additional amount for sales tax because of the benefits of shopping local. The problem is when there is a big difference in the price even before sales tax.


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RE: Will receive a tax bill for today's out of state purchase. Tr

I would rather shop locally and pay the tax if local dealers will price match online prices. I have found most stores willing to do so to make the sale.

CA is aggressive about collecting taxes, so I came up with an easy record keeping system for online purchases. In my e-mail inbox, there is a subfolder called "Taxes." Whenever I make an online purchase, I receive an email from the seller confirming the sale. That email gets moved immediately to the Taxes folder. Email receipts for online charitable donations go to the same file. Then I just have to look in that one email folder at tax time each year.

CA gives us the option of keeping track of out-of-state purchases or paying a use tax equal to 0.7% of adjusted gross income. Since most of my online purchases are from Nordstrom and other stores that collect CA tax, there is no way I am using that 0.7% formula rather than keeping records.


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RE: Will receive a tax bill for today's out of state purchase. Tr

Most states with a sales tax also have a 'use tax.'

You are supposed to pay the use tax on items purchased outside of your state that you did not pay a sales tax on in the state of purchase.

Virginia cracks down on the NC furniture edliveries every once in a while.

The shipping records are accessible to the state, and they use them to find out where the $15,000 in furniture went, then slap the buyer with a tax bill.

Or at least a gentle reminder to 'declare and pay' the 'use tax' or face further action (like withholding your state tax refund).

They have done it since the value for a single shipment to a single address can be so high.

The rise in out of state purchases from the internet has been driving ALL the sales tax localities crazy.

ALL they see is falling revenue, and are looking for a way to collect.


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RE: Will receive a tax bill for today's out of state purchase. Tr

call YOUR state dept of revenue and ASK them. They can also send you written copy of the their code on USE tax. It also might be online.

Not all out of state purchases are taxable in all states. It sometimes depends on nexus.

To know how your state handles it, you will need to contact them.

One thing about that phone call tho - I wouldn't tell them you have or are buying whatever out of state. Just say you 'heard' this and couldn't believe it was true etc. OR if you know how to block your number from showing on THEIR caller ID, do that. Otherwise you are giving them an easy way to track you.
I've worked in a tax dept and people give out all sorts of info that can be used to track them.

I don't say this to help you NOT pay tax you owe but just so that you aren't put in the position of having to prove you DON'T have any items purchased out of state that would be taxable, if you don't.

In an audit the sales of a company to people out of state will be shared with that other state if the tax was due to them and not collected by the company and submitted to that state. Many businesses (like QVC) regularly collect the tax and submit to the state of the purchaser - if it is required.


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RE: Will receive a tax bill for today's out of state purchase. Tr

Here is the info for Maryland;
http://individuals.marylandtaxes.com/usetax/usetax.asp

Note the page says:
Every state that has a sales tax also has a use tax.


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RE: Will receive a tax bill for today's out of state purchase. Tr

Depends on which state you are in. CA is very aggressive. They have been purchasing info from shipping companies and other sources to go after people to declare their purchases. I believe a few other states are also following this lead. I believe that they are not allowed to monitor exactly what you purchase for privacy reasons, but they just know that you did purchase something that you should be declaring. I think most of the time, they will go after and audit small businesses before individuals though. So it is always a gamble whether you want to take the risk/hassle or not.


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RE: Will receive a tax bill for today's out of state purchase. Tr

I have never heard of this! What is the statute of limitations? Any idea?


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RE: Will receive a tax bill for today's out of state purchase. Tr

I believe statute of limitations is usually 3 years for tax audits.


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Give the local stores a chance

I started the thread, so I'll follow up. I just decided to buy my dishwasher locally. Seems that people have bad expectations about dealing with sales persons. I didn't. I went into a couple of local appliances stores with the exact item I wanted to purchase, nobody tried to up-sale me anything. Everyone I dealt with respected my choice.

The best part was: with the speculation going on that you may receive a tax bill years down the road for items you purchased online today, I was happy that my local store can lower the price so that my after tax cost will be just a little higher (<$100) than what I would pay buying online (without paying tax). I don't need to worry about a surprise bill and my store can hold the item in their local warehouse until I tell them I'm ready for the delivery.

That purchase concluded my whole kitchen purchase of appliances, all with taxes paid up front even including a cooktop I did purchase online. I can sleep in peace knowing that there will be no surprise bill in my mail box.


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