Buying without sales tax? for large equipment

[Ramairfreak98ss]

I live in NJ, i have a few local JD dealers, yet buying a tractor that is possibly over 25k, thats a huge chunk of change for sales tax at 6%... Its only 80 miles to deleware and maybe 130 miles to their JD dealer. Id like to support the local dealer in the purchase at least, but i can save $1200+ in this sort of situation. Has anyone else done this? Going to somewhere farther away to save tax or money on a purchase? thanks

 

[Big_Cajun]

Hello Ramairfreak:

I'm sure many people have gone very long distances to save money on tractors. I live in Louisiana and I know people who car/truck shop in Texas because of the great deals...so I would say without a doubt that people cross state lines for great tractor deals.

BC

 

[Bob_Skurka]

While there is no question that crossing state lines to get a tractor can result in a "tax free" purchase, you should be aware that your home state will require you to pay the tax and failure to do so may result in a rather unpleasant surprise in the form of a bill from your state for the tax due, plus interest, plus penalty. It may or may not happen. But if you finance your tractor, it is far more likely than if you pay cash. In any case, tax evasion is illegal and you should be aware of it.


Disclaimer, I am not a tax accountant or lawyer, but I do testify on a regular basis on tax issues before many state and local legislative bodies (in fact I have to do it again tomorrow in Cook County, Illinois). I have been used as an expert witness to testify on excise tax issues in court as well as have been invited by legislators to testify on cross state tax issues.

 

[wolfe1]

If you can in any way not pay the taxes do it. If you have to title it in your state they may find out - I saved several hundred dollars crossing state lines- I would like to support my local dealer too but when I see my property taxes exceeding a grand a month it makes the decision real easy.

 

[danbike]

There is a similar issue in Illinois. The logic from Springfield is that if you are buying out of state and have them deliver it, then it would be eligible for an Illlinois USE TAX. That tax is self assessed. I'm sure you would remember to file the self return and pay the tax. Just don't get caught forgetting to pay it. There is a penalty. Guess you don't want to piss off your enemies who might rat you out.

 

[Ramairfreak98ss]

yeah someone was saying that in NJ, there is a USE TAX too, anyway, i would be financing most of the purchase too.

For businesses, can you write off the purchase or depreciation of equipment like a tractor if you didnt pay a state "use tax" ? In NJ i would NOT have to register my tractor with the "division of motor vehicles", its only for vehicles driven on public or state roadways. I cant see it any different than my zero turn mowers that i have, yet i did pay tax on them bought in NJ.

 

[HappyCPE]

In NJ, if you are a FARMER, then you file a form ST-7 with the purchasing dealer and you will not have to pay tax. That's how I did my 4320 purchase. I believe if you are a BUSINESS, like a landscaper, you render unto Corzine what is Corzine's.
Here is the link with the NJ Div of Taxation: http://www.state.nj.us/treasury/taxation/pdf/other_forms/sales/st7.pdf
It is pretty clear on what the sales tax rules are.

 

[kjb]

In Louisiana farm equipment is tax exempt up to the first 50000.00. I know in Texas there is no tax on farm equipment. Whether or not you purchase it out of state or not, if you don't have a legitimate address in the state you purchase it, then you're supposed to be charged taxes. 1200.00 could easily turn in to 3200.00 if they should check. Another factor is service. I'd say pay the taxes and stay close to your local dealer, he'll take care of you down the road.

 

[LeadPoison]

In Mississppi the farm tax is 1% on tractors.

 

[Ramairfreak98ss]

im not a farmer /forums/images/graemlins/frown.gif lol, so no farmers discount tax for me /forums/images/graemlins/tongue.gif