Buying without sales tax? for large equipment

[6or7dazeaweek]

Ramairfreak...I think your post was for a comment I made earlier. If not, then I stand corrected.

I mentioned buying out of state to save the tax but I would not be willing to truck my tractor across state lines to get it fixed. Therefore, I'd be looking at a local dealer to have anything fixed. Not sure how I'd be treated since he didn't make the original sale. I do think he'd be bound by the terms of the dealership to provide service but I'm not so sure it would be in my best interest. I think I'd rather build a good rapourt with the local dealer even though tax is involved.

Just my opinion. Thanks !

Jon

 

[755inNY]

<font color="blue"> So your telling me if i went to DE, bought a tractor with no tax, which is the same as buying a $100 item at the mall without tax on a credit card, that DE will tell NJ tax division about the purchase and charge me for tax on something i bought in another state? </font>

DE may not tell NJ about the $100 transaction but most states that have a sales tax also have a use tax. The following is from the NJ tax web site:
<font color="red"> In New Jersey use tax is a tax on the use of items or services that occurs when sales tax has not been paid on taxable items or services, or paid at a rate less than the New Jersey rate of 6%. Use tax is due when these items are purchased outside of New Jersey and brought into New Jersey.
</font>
The point that many have made in this thread, and others like it, is that buying a tractor out of state does not necessarily eliminate your tax liability. Your home state may very well contact you for the use tax and may assess interest and penalties. States have many ways to track such transactions. IMO you don't want the tax man on your back.

Jeff

 

[danbike]

Many moons ago, I worked for the CNW railroad. We were always having issues with use tax since we had operations in so many different states and tax areas. One thing you can bank on is that most dealers have to report sales to their home state tax agency, ESPECIALLY for large ticket items. The states then will try to make sure they get their CHOMP at the apple. Good luck, but be careful.

</font>
The point that many have made in this thread, and others like it, is that buying a tractor out of state does not necessarily eliminate your tax liability. Your home state may very well contact you for the use tax and may assess interest and penalties. States have many ways to track such transactions. IMO you don't want the tax man on your back.

Jeff )</font>

 

[robison]

If you are a business owner/tractor user you would be foolish to fail to pay tax on the tractor, because small business tax audits are common, and if they catch you on the tractor you'll pay for 10 more things and before you know it the $1000 savings will be a $10,000 tax bill.

If you are a private party you may get away with buying a tractor in a neighboring state without paying tax. Then again, you may not.

New Jersey's department of revenue may, for example, request records from John Deere and every other machinery and vehicle maker and compare them to tax receipts. There are many automoted ways like that by which you could be caught.

And if you're caught your tax and penalty is likely to be at least 40% more than the tax would have been.

New Jersey and Delaware may actually have agreements whereby a NJ auditor could check sales records in DL for residents who bought tractors there.

I know as a MA car dealer CT or RI auditors can check our sales to their residents. I imagine NJ is similar with its neighbors. I know MA auditors make a big deal of catching people who buy cars free of sales tax in NH.