New shipping issues

Was at my local salvage yard last night and they were talking about some new shipping rules that have made it difficult to ship parts. Used to be they had to charge only local taxes on each sale, now they are required to charge not only our local taxes, but the local taxes at the recievers location as well. That means they need to know and pay all state and local taxes to every state, city, township or whatever. It has made it too difficult to bother, so they quit shipping. Anyone else heard of that or had a problem with it? They say it's because of Amazon, don't know if they wanted it or if it's because of all the taxes they don't get because of Amazon.

Amazon and other on line sellers are big enough to use a computer based system. My belief is that for years small businesses ignored the rule. But now that the process of inter state/nation shipping has become endemic, local, state and national governments are finding a very high percentage of revenue loss. The complexity is increased when a company has legal ties across state lines to the buyer (destination) Not a lawyer thank all goodness. Jim
A basic link to the rules not legaleexe

I've filled out Ag sales tax exemption forms for a couple companies I deal with out of state since Virginia doesn't charge sales tax on farm related things like tractor parts,tires,seeds etc.

Sounds like they are trying to double tax you ? Sales tax should only be on where it is shipped to ? And this varies greatly down to local townships and it can be a real hassle.

Most point of sale software these days is able to handle the sales tax based on the buyer's ZIP code. If your salvage yard doesn't have a modern point of sale system that can handle it and doesn't feel the need to upgrade, and doesn't feel that the income from out of state sales makes it worthwhile, that is their prerogative.

There are websites out there where you can look up sales tax rates by ZIP code. Of course then they have to submit that money to each respective state with all the requisite paperwork...

No double tax, just have to pay the tax to where it is shipped.

(quoted from post at 14:04:03 08/07/19) Sounds like they are trying to double tax you ? Sales tax should only be on where it is shipped to ? And this varies greatly down to local townships and it can be a real hassle.

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They are trying to pick up the sales that don't have any sales tax. Every state in the union figures they're missing out on millions. Brick and mortar based businesses figure they have a disadvantage because it becomes cheaper to buy something from another state than to buy local. I think we're nearing the end of buying anything without sales tax.

Like the other guys said, the salvage people are wrong.
They need a competent attorney or accountant.
Amazon finally gave in and started charging and remitting sales taxes based on buyers' location.

The states pass these laws without a thought to the repercussions. Here in texas I got rid of my tax permit because the government here has the tax code all screwed up. When I work for someone I'm suppose to charge the tax rate for the customers location. That sounds simple enough but they make no provisions to pay the state that tax. At the end of the quarter I was charged sales tax on all the supplies I sold at the tax rate where my shop was located which was 2% less. I know sooner or latter I would have to go back through years of records and account for that 2% and probably pay a fine too. Now I pay the sales tax on the supplies I buy and just bill the customer for it including the tax.

"They say it's because of Amazon"



Actually, you can thank the state of South Dakota for all that.

"South Dakota v. Wayfair, Inc."
(June 21, 2018)

https://www.avalara.com/us/en/learn/sales-tax/south-dakota-wayfair.html

The salvatge yard owner needs some advise from a good business consultant or service. There are sales tax clearinghouses to help, but the rule is often misunderstood, too.

From the FAQ at one sales tax clearinghouse site: "Merchants are required to collect sales taxes when the customer is in the same state or the merchant has "substantial nexus" in the customer's state."

If it is a tiny operation with few out of state sales they might be better off to stop shipping, but they really should find out for sure what the rule is so they can make a good decision.

Right or wrong, dealing with this sales tax issue is NOT without cost. Attorney time to tell you that you're wrong. Accountant time to tell you that you're wrong. Point of sale software upgrade charges if you're right. Tax clearinghouse service charges if you're wright.

When the cost to do business exceeds the revenue generated by that business, continuing to do business is called bad business. Just because farmers spin their wheels for no gain year after year does not mean that's how all businesses operate, or should operate.

I say good deal maybe stores will come back into fashion again .

That is what our moderators spent all their time doing last winter and spring. Getting all the info needed for this into their computer data base. High taxed states like ours felt that they were loosing business and not getting their "fair share". I am sick of paying extra to support someone who is unwilling to support him/herself, reguardless of the color of their skin.---Loren

As farmers are you not tax exempt in your neck of the woods? I am in Texas.

Agreed 200%. RB

Your last sentence put the nail into the coffin. Time consuming and costly, with no
compensation.---------------loren

Every other business has the same requirement. Reading between the lines, the salvage yard could be avoiding the software investment because they might be getting ready to close down the business. The outlook for salvage yards is down right now.

True. Online sales will continue to grow. Larger businesses can efficiently spread the costs over higher sales volumes. Smaller businesses may not have the economy of scale to continue to compete and will merge, sell out or close.

Farmers may be exempt in states like mine, but the rules get grey and fuzzy as the states like mine reach out for more and more tax revenue.

Auctions have different rules if it is an estate auction on the farm, or a consignment auction of multiple parties; one most stuff is exempt, other only the large farm implements are exempt.

Parts that can be used on non farm stuff are not exempt, farm parts that only fit on farm stuff is exempt. The state defines things differently than you or I would, lot of grey area. My farm store has to charge tax on electric fencers, because some people use them to keep deer out of a garden. Not a ?farm use? so then all the sales get taxed.

And so, these resale?s need very expensive software that sorts out all the different taxes from different states, counties, townships and what tax might apply to what item. That software needs updating every month as some govt agency wil come up with new rules that often. Generally the software costs more than the taxes do to keep updated!

My farm address is in a different county than my actual farm is; my postal address actually covers 3 different counties and many townships. Until recently the 911 addressing hadn?t been implemented well enough to indicate which actual county of the 3 my farm was in, so they had to have their own database to sort out from my address where I actually was located.

Then most states like mine need paperwork from each and every farmer now that states the individual is farming. And each state has slightly different piece of paper to sign and wants to collect your social security number for this. (Most allow a drivers license instead for security reasons....)

It is, basically, a very expensive paperwork nightmare for any Ag retailer. It pushes a terrible amount of paperwork or buy into a terrible expensive software solution.

All so these high taxing states can get their pound of flesh.

Paul

Sales tax on an internet purchase is a MUST as a lot of local counties, towns, and villages are losing their revenue due to online sales.

An alternative to not collecting taxes on internet sales is to increase the local property taxes as these counties, towns, and villages need the revenue to continue to maintain roads and other local government expenses. I should say that this is not an alternative, its reality and this is what has been happening.

As much as I do not like this, I do applaud this as a property owner because everyone pays the sales tax regardless who they are, not just the property owners.

About 5 years ago my daughter was writing the program for an online retailer to calculate all the taxes for all the difference states, counties, cities and towns based on buyers zip code. Every month the company had to update the tax tables in the program.
So this requirement has been in place for some years now for online retailers but maybe it was not being enforced.
The most difficult problem she had was the computer language she was using had no function to do money calculations were fractions of cents were involved. The computer language did not follow the rules of rounding up or down fractions of cents properly and when you did the calculations with an electronic calculator the answer would be different from the computer program.
She used to get teased by her coworkers about having an electronic calculator on her desk but she always had to verify that the calculations of her program matched the calculator. These calculations would have been very simple using the COBOL computer language as it had all the proper rules for handling rounding up and down of fractions of cents.
Example, take a state that has a 3.7% sales tax , then a county tax of 1.4% and city tax of 1.7% and the purchase was $137.79 then
each tax for each level of government had to be calculated separately and stored and then add the taxes to the selling price to give the total selling price in a number in the form of $$$$.cc and the amount had to agree with an electronic calculator.
At the end of the month the company had to do an electronic funds transfer of the tax $$ to each state,county, city,

Rather long but just attempting to show the state, county, city and town sales tax has been a requirement for online sales for a few years now and how complicated a computer program has to be to calculate the tax for the different levels of government and transfer the tax payments.

(quoted from post at 07:19:58 08/07/19) I say good deal maybe stores will come back into fashion again .

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No way. A company like WalMart or Amazon gets volume sales. When you buy in bulk you generally get a better price. That's even true for us peons. Go buy a single can of pop. Then at normal prices see what they charge for a 12 pack. That's why buyers clubs work too. The sell little that is no sold by the case or larger than average lots.

Funny thing is WalMart and such didn't kill the mom and pop shops. Mom and pop wanted to retire. JR took off and didn't want to mess with it. So it gets sold. Now mom and pop had the building paid for and most likely very little debt. So they sell out and the buyer now has a lot of debt. If they make it more than a couple of years it's amazing. And they have competition too now from online sales. here when they opened WalMart a lot of the mom and pops stayed open. Yea they reduced prices but they did fine. On 10-15% less than what they had been charging. Guess what? That means they were price gouging us because they were the only game in town.

Rick

Sales tax thing is funny back in 90's WV was after some equipment dealers in Harrisonburg VA to collect sales tax on tractors and equipment they sold to WV farmers and delivered into WV.The dealers didn't normally charge sales tax because farm related equipment was tax exempt in VA.I knew of a couple new tractors that were unloaded on the VA side of the state line and driven by the new owners the rest of the way to their farm.So legally the whole transaction took place in VA and the new owner took possession in VA.

(quoted from post at 06:50:19 08/07/19) "They say it's because of Amazon"



Actually, you can thank the state of South Dakota for all that.

"South Dakota v. Wayfair, Inc."
(June 21, 2018)

https://www.avalara.com/us/en/learn/sales-tax/south-dakota-wayfair.html

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Bob there is a lot more to it than that. States were yelling loudly that they wanted to federal government to pass legislation that would force collection of individual state sales tax for catalog/out of state sales back in the 1980's. You know places like Sears catalog, Cabella's, Gander Mountain and Bass Pro. Once online sales started it became a real issue. I know folks who bought online just to avoid paying sales tax. Funny but most of the folks I know who did that are related and do not own their own homes. Course they are the same ones who vote yes every time there is a new tax levy on the ballot and can't figure out why their rent goes up immediately when it passes.

Rick

(quoted from post at 23:10:43 08/07/19)

(quoted from post at 07:19:58 08/07/19) I say good deal maybe stores will come back into fashion again .

Click to expand...

No way. A company like WalMart or Amazon gets volume sales. When you buy in bulk you generally get a better price. That's even true for us peons. Go buy a single can of pop. Then at normal prices see what they charge for a 12 pack. That's why buyers clubs work too. The sell little that is no sold by the case or larger than average lots.

Funny thing is WalMart and such didn't kill the mom and pop shops. Mom and pop wanted to retire. JR took off and didn't want to mess with it. So it gets sold. Now mom and pop had the building paid for and most likely very little debt. So they sell out and the buyer now has a lot of debt. If they make it more than a couple of years it's amazing. And they have competition too now from online sales. here when they opened WalMart a lot of the mom and pops stayed open. Yea they reduced prices but they did fine. On 10-15% less than what they had been charging. Guess what? That means they were price gouging us because they were the only game in town.
Rick

Click to expand...

And guess what, all them Mom and Pop's could have done the same thing that Sam did.

No way would i go back to mom and pop shops. Limited selection. Sky high prices (for whatever reason) and this kicker: Walk out the door with it and
bubba, it's yours.....don't look back!! Pfffffffft on them!

Don't forget that most Mom & Pop stores are only open from 10AM to 4PM Monday through Friday. How's a working guy supposed to do business with them?

I just got this from NCDOR...

Prospective Liability Effective November 1, 2018
The Department will apply the Court s ruling in the Wayfair decision on a prospective basis for
remote sellers that do not have a physical presence in North Carolina if the remote sellers are not
registered to collect and remit North Carolina sales and use tax. This prospective treatment does
not apply if a person has a physical presence or other legal obligation to collect and remit North
Carolina sales and use tax.

The Department requires all remote sellers having gross sales in excess of one hundred thousand
dollars ($100,000) sourced to North Carolina or two hundred (200) or more separate transactions
sourced to North Carolina in the previous or current calendar year ("Threshold") to register,
collect, and remit sales and use tax to this State effective November 1, 2018 or 60 days after a
remote seller meets the Threshold, whichever is later. Remote sellers may voluntarily begin
collecting and remitting sales and use tax any time prior to November 1, 2018.

For purposes of this directive, a remote seller that does not meet the Threshold may voluntarily
register with the Department to collect and remit sales and use tax to this State. Retailers and
remote sellers that are currently collecting and remitting North Carolina sales and use tax should
continue to do so.