Buying Advice Dealers advertising no out of state tax...

[LD1]

I dont know if there is any truth to this following statement, and dont know if it applies to new sales or just parts...... maybe a dealer will chime in......

I was told by a couple out-of-state kubota dealers that they have to charge an additional 10% if they are shipping parts across state lines.

Its to encourage customers to use their local dealers for parts rather than online or out of state.

Perhaps the same could be done for out-of-state tractor purchases?

 

[Turbys_1700]

Could be true but sounds like to me a dealer way of getting an extra 10% on parts. Not to disparage dealers but I know several that have tried to skirt state taxes by not reporting those to the state when they sale an item.

Here in NC many years ago no tax was required on farm tractors and like most other states eventually they raised the sales tax to where it is the same for anything. The only way around it is the farm exemption which requires filing and a listing of sold items from the farm. I am not sure the yearly amount but it is pretty low. Same thing applies to local land tax use for county revenue.

 

[LD1]

Could be true but sounds like to me a dealer way of getting an extra 10% on parts. Not to disparage dealers but I know several that have tried to skirt state taxes by not reporting those to the state when they sale an item.

Here in NC many years ago no tax was required on farm tractors and like most other states eventually they raised the sales tax to where it is the same for anything. The only way around it is the farm exemption which requires filing and a listing of sold items from the farm. I am not sure the yearly amount but it is pretty low. Same thing applies to local land tax use for county revenue.

In this case, I dont think it was to try to get an extra 10%.

It was when I blew the engine in my kubota and prepping to drop the ~$7k for a new engine.

Given the rather large purchase, I'd figure I'd call around...(to try to skate by the sales tax).

Out of state dealer was same price with the motor give or take $50. But ~$100 more to ship. But no 7% ohio sales tax would have saved me $500. And was prepared to buy. He asked my location and thats when he said 10% more for out of state.

He knew my local dealers charge. And knew by telling me 10% extra was gonna cost him the deal. So I dont believe it was simply a ploy to get an 10%

 

[mred2]

Many tractor dealers must pay to sell outside their area. I know we have to pay the other dealer 5% of the sale price. And there is a fee for selling new parts outside of our area. Helps to protect your sales area. We can sell used equipment anywhere.

 

[Crazydad]

One of the reasons I shied away from Bruno's.

When I walked in to Bruno痴 recently and was asking about pricing and mentioned the no tax for out of state, I had to show him my Texas license and walked him out to my truck with Texas plates. I got the feeling they don稚 like the no tax thing but have to do it to compete.

 

[4570Man]

I wasn’t aware of such a law until I read about it in a thread here a while back. Maybe the dealer wasn’t aware either. I don’t think they would knowingly blatantly advertise tax evasion. In either case I’ve never heard of the law being enforced.

 

[kthompson]

I have NOT seen the ad being discussed but without seeing it but, it could also be said they are "warning" you of that fact they do not "collect" out of state sales tax so you will be aware you are on your own on this. Retailers DO NOT "CHARGE" sales tax, they collect it.
Not saying they have strong belief the reader is thinking that is a savings of the tax.

As to some tractor dealers saying they have to charge an up-charge if they shipped out of state to me that is both good and bad. I would say if a tractor company had that policy then they ought to have a parts ordering system that is nationwide and the order goes through the local dealer with pricing and shipping being uniform. If I knew brand I wanted tried to control where I bought the tractor or parts would walk on it. That is NOT FREE Market.

I know some heavy equipment companies will not sell you a part without a serial number to help control theft. Can understand and appreciate that. Also often they do need the serial number for the correct part due to changes in a model line. Ran into that on a simple lawn mower deck belt this week.

 

[Threepoint]

When I walked in to Bruno痴 recently and was asking about pricing and mentioned the no tax for out of state, I had to show him my Texas license and walked him out to my truck with Texas plates. I got the feeling they don稚 like the no tax thing but have to do it to compete.

Interesting. I can understand why the dealer/salesman asked for your driver's license. He would need to confirm that you in fact live at the out-of-state address where he delivers the tractor. Otherwise, the buyer might be giving a cover address (e.g., a relative's, a buddy's or an employer's address), while actually living in Arkansas and intending to bring the tractor right back into Arkansas. But what's curious to me is why he needed to see your truck's license plate.

Not to get too convoluted here, and I'm sure it didn't happen in your case, but I've heard of rare cases where a vendor will even allow the buyer (or the buyer's agent), to load the goods at the dealership and then "self-deliver" out-of-state without paying sales tax. That's a huge risk for the dealer (although not the buyer). Not only is the dealer then liable for the sales tax he failed to collect, he could also lose his business license, and even face criminal charges. The "self-delivery" pretext doesn't work because even in a "point of delivery" state (e.g. Arkansas and most others), the test of "delivery" is where the buyer "takes possession" of the goods. So, if the buyer, or even the buyer's good buddy with a trailer as a favor, were to pick up the tractor at the dealership, then transport it to the buyer's home across the state line, the dealer should still be collecting state and local sales tax. That's because the buyer has effectively taken possession from the dealer there. Moreover, if the buyer's state of destination has a use tax, the buyer will be liable for use tax (absent some exemption) as well, because no equivalent (or greater) sales tax was collected in the dealer's state!

 

[Crazydad]

But what's curious to me is why he needed to see your truck's license plate.

I should add they are OK with selling and shiping out of state without collecting tax. Since I was standing there asking about a package deal with a trailer to move it out of state myself then mentioned no tax everything changed. He got a blank look and stare and I thought I just blew the deal I was trying to make as it was hard to find someone willing discount everything including attachments. So after he asked if I had Texas license I quickly took it out and showed him then took him outside to show him my truck. Even then I could see he was still uncomfortable.

I used to own a electronics store and every now and then someone would say they were going to take the tv or stereo out of state to another home and wanted it tax free just like amazon. I had to tell them to buy it from amazon because the state audits my books randomly and it’s not worth the deep dive the state comptroller will do if I sell out of state.


I think the no tax out of state window is closing fast.

 

[Diggin It]

I should add they are OK with selling and shiping out of state without collecting tax. Since I was standing there asking about a package deal with a trailer to move it out of state myself then mentioned no tax everything changed.

I used to own a electronics store and every now and then someone would say they were going to take the tv or stereo out of state to another home and wanted it tax free just like amazon. I had to tell them to buy it from amazon because the state audits my books randomly and it’s not worth the deep dive the state comptroller will do if I sell out of state.

You wanted them to do the same thing your buyers were asking. How was he to know you didn't just buy property in Arkansas and were taking the tractor and other items there? Or to a family member there?