Sales Tax

[BDJ]

I've been following this forum for a while and don't recall running across this issue yet. I'm getting ready to buy my first "real" tractor (conisdering the B7500HSD and the B2710) and been doing a litte price shopping as suggested so often in this forum. Here in the Evergreen State (Washington), our governer sees fit to collect a sales tax of 8.6%, and local counties have the option to tack a few points on top of that. Ouch! Just across the Columbia River, our neighbours in Oregon don't feel compelled to rob you based on your purchases (they take their chunk from your paycheck). Obviously, the possible $1500 savings makes a three hour drive to Oregon seem like it might be time well spent.

However, when I was talking $$$ with a local Kubota dealer recently, the topic of out-of-state buying came up. He told me that when a buyer or the dealer sends in the warranty paperwork to Kubota, Kubota sends a copy of that paperwork to the government of the state which the buyer listed on his warranty registration. Supposedly, that state can then pursue the new tractor owner for any state taxes owed, and also impose any fines available within state laws for "smuggling" a tractor over state lines without paying the tax trolls.

I don't know if this is true for all states, only Washington State, or if it's even true at all. It wouldn't surprise me if the dealer, knowing that I have been researching Kubotas through Tractorbynet, is just using whatever tactics he can to get me to buy from him. Granted, dealers in any state that imposes a sales tax are handicapped when it comes to price competition. On the other hand $1500 is $1500.

Has anyone else heard of this policy by Kubota? Is this a deal Kubota has on a state by state basis, or a blanket policy for all states? Is it even true at all? I'm particulary interested in Washington state, but any info the Guru's of this site can offer would be welcome.

Thanks in advance......

Brad

 

[Von]

Brad,
Boy, thats a new one to me! It sure sounds like a last ditch effort of the dealer to make the sale. Talk about scare tactics! I sell alot on the internet and don't charge out of state buyers sales tax if I ship it out of state. I think if the dealer delivers it out of state there will be no tax, but if you pick it up it that state you do owe that state's tax. Each state is different, and I know that the feds are not interested in getting involved with the issue right now because internet sales are driving the economy. Taxing all sales will just throw us into a tailspin, and we will be suffering like Japan. Ask around and don't be scared of buying from out of state.

Von

 

[Bird]

I believe for the amount of money involved, I would call the state office responsible for collecting the sales tax and/or a tax attorney and ask a few questions before buying anywhere.

Bird

 

[Mike H]

In the state of Michigan, if you purchase something out of state, you are responsible for remitting your 6% to the State. I've never known somebody who has actually done this, but it is the law and they're getting more vocal about enforcing this. It is highlighted in our state tax forms and our governor is one of those leading efforts to get the state's hands on these funds. Right now the federal government has protected the Internet but catalog sales are the pot of gold. I sure hope we can keep the Internet tax free!

 

[_RaT_]

Von, I'm a little confused about this issue, maybe you can help. I don't know of any tractor companies that "sell" over the internet but rather display and promote their company and its products via the internet. Carvers Tractor I believe falls into this category. The actual purchase is probably done around the internet via a loan application that is faxed or sent by mail. I think very few tractors are purchased via credit card over the internet, although I am sure its been done. Where does simply promoting your products versus selling your product on the internet happen. Carvers is a brick and mortar company but also does a wonderful job at promoting itself on the internet. If I decide to order with them, I will be giving them a credit card number as a deposit to execute the order, the rest will be done via the Kubota loan they offer. Would this constitute an "internet purchase" Thanks in advance, Rat...

 

[Von]

Gee Rat, thats a good question. I think it doesn't matter how it is paid for but where delivery takes place and how. If you buy from someone out of state and then have it shiped to you, you most likely don't pay the tax. As stated in another post, state law may say that it is up to you to send in the tax. (I don't know of any one who has yet volunteered to pay more taxes!) If you make arrangements to pick up your new tractor over state lines than I would be inclined to believe that you would be charged that states sales tax. I maybe way wrong, but if I buy a new tractor I will most likely buy from out of state.

Von

 

[sjvalin]

I posted a similar question here a couple of weeks ago. I was debating whether to order from Carver, buy locally, or drive the 6 hours up to Medford, OR to save tax. The local dealer had said something similar - he was saying that when you finance the tractor, a UCC1 form is filled out and becomes public record. If one were really paranoid, one could imagine some state gov't official snooping thru these to look for large purchases out of state. I'm not usually that paranoid, but maybe I should be? I ended up buying locally, since the dealer was able to come pretty close to Carver's price with shipping.

Personally, if I lived within 3 hours of OR, I would probably have bought one there, assuming the dealer could do as well on the price or better.

 

[BDJ]

Von,
I'm not completely clear on the pick it up/deliver it thing. As a concrete example, if I drive from WA (8.6% sales tax) to OR (no sales tax), pay cash, pick up a tractor and pull it back to WA, would I now owe 8.6% to WA? If I buy from the OR dealer (again, cash deal) and have the purchase delivered to WA, do I owe WA sales tax now? I'm not asking for a legal response here, just your best understanding of how the system works. Obviously, I will pursue this with the appropriate authorities if it appears there is a chance this is a viable option to save significant $$.

Also, do you have any idea if there is any truth that the Kubota regional office would take my warranty paperwork, filed through the Oregon dealer, and forward a copy to the State of Washington because the warranty registration address (mine) is in Washington? I haven't heard of a manufacturer doing this for equipment or merchandise that does not need to be licensed or registered with the state.

Thanks again for your input...

Brad

 

[Von]

Brad, If you take delivery at the OR dealer, I would say that you owe OR sales tax. If the OR dealer ships it to you in WA, you pay no sales tax for either state. (unless the jointing states have a shared tax agreement, as NY, NJ and CONN do) It depends on where you take possession of the tractor. The OR dealer does not collect sales tax for another state (unless the above mentioned, or if he has a location in that state as well) And WA does not know that you bought the tractor and does not know that you did not pay sales tax to OR. That is if you don't tell them! Sure its a gray area, but then who likes what our state gov. does with our tax money anyway. They will just use it to build some millionare sports franchise owner a new stadium so he can get richer!

Von

 

[Phazer]

Something else you might want to check on. Here in FL, tax is around 7.5%, but if you are using the tractor for farming, it's only 3%.
I was also told that a UCC gets sent in if you finance, and that can be followed up by the State sales tax guys. I was happy I only had to pay 3%. Do other states also have tax breaks for farmers?