Buying without sales tax? for large equipment

[Bob_Skurka]

FWIW I am amazed by the advice you are getting. People are literally telling you to violate the law. I hope they will chip in and pay your tax, interest and penalty when/if you get a tax bill in the mail. They usually show up a year or two after you buy the tractor. Most are sent due to the state's reciprocity laws with their neighboring states, but many are sent due to the financing disclosures.

You do what you want. But when people give you advice that specifically tells you to screw around with the tax man then you might want to think twice.

 

[Big_Cajun]

The last time I crunched numbers with a salesman, he told me that because the tractor would be used on a farm, I'd only have to pay 4% tax. That's a break from the normal 8-9% that we pay for on everything else.

I wasn't aware that farm equipment was tax-exempt up to the first $50,000 here in Louisiana...I'll have a talk with my accountant when I do my taxes later this month.

BC

 

[6or7dazeaweek]

Let me say that I have considered buying out of state to save the sales tax BUT, I've since changed my mind. First of all...whatever I buy is going to break down and while I don't mind driving an hour & a half to save the sales tax, I surely don't want to be trucking my tractor that far to get it fixed. So, are you planning to take your tractor to the local dealer to get serviced or to the selling dealer where you saved the tax?

I've found some pretty good dealers locally and although I don't like paying the tax, I'll do it just to support the local fella and not feel guilty when it comes time to getting things repaired.

Yeah it's a hefty chunk of change but in reading these forums, there isn't a tractor brand out there that won't need fixing...sooner or later. Just my 2 cents worth.

 

[frank29]

Like you, I am approaching a large outlay for a tractor. I share your desire to avoid sales tax.

Over 50% of my income goes to taxes. The federal & state hit is approx 35% off the top. From the drastically reduced total, sales tax takes another 7% on most purchases. Add property tax. Add ad valoerem taxes. Add fuel tax. Beyond this there is a host of smaller taxes that are mostly hidden.

I am embarrased to admit that in the past I actually voted for extra local sales taxes for particular projects. Never again.

We live in the greatest country in the world. Even so, our government, regardless of which party is currently in power, has an unbelievable appetite for YOUR income. Our government, in this country I love, considers the money YOU are allowed to keep as a "tax expenditure"....now that is flat out backwards.

I am keeping less than 50 cents on the dollar. Enough is enough.

 

[LeadPoison]

Join the club my friend. I could go on and on about taxes. Get on a tractor and I bet it takes some of the edge off! /forums/images/graemlins/grin.gif

 

[755inNY]

<font color="blue"> our government, regardless of which party is currently in power, has an unbelievable appetite for YOUR income. </font>

I think that is true for any government in any country.

 

[wolfe1]

"I am keeping less than 50 cents on the dollar."

Ummm- Time to fire your accountant-

 

[frank29]

</font><font color="blue" class="small">( "I am keeping less than 50 cents on the dollar."

Ummm- Time to fire your accountant- )</font>Unfortunately, many people only think of their state & federal taxes. While this is the lion's share (for most people), other taxes add a significant burden.

Sales tax. I pay 7%. Some states are over 10%!

Ad valorem taxes. No problem if you drive old cars. I bought two new cars last year: after paying the 7% sales tax, I also had to pay over $700 for my tags.

Property taxes. I don't want to even think about this one!

Fuel tax. Varies for $0.08 to almost $0.30 per gallon.

Sin taxes.

A host of other taxes hidden in various ways.

Most people's total tax hit is larger than they think.

 

[Ramairfreak98ss]

About the local dealers, say i buy in CA, and get it fixed locally in NJ, does the local dealer get reimbursed by JD like most auto dealers to fix the problem under its warranty? Its not like im taking a tractor from another dealer and saying i didnt buy it from you but fix it for free.

About the tax now, what law states you must pay tax on items bought outside of NJ? If i go to DE and buy something, thats why they have no sales tax to boost revenue and industry in their state. Theres also places IN NJ that offer 3% tax not the normal 6% in all other cities/towns. No dealers in these areas though.

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?

 

[frank29]

Your comments are not applicable to my posts; I think you meant to reply to a different member.

Anyway, you pose interesting questions. Like you, I would think any dealer would perform warranty work. Maybe a dealer or someone with experience will provide input.

About the sales tax, maybe it could be avoided or reduced by selecting a dealer in the "right" geographic location. Since the tractors are not registered like cars, this might work. Again, maybe someone with first hand experience will comment. ON EDIT: there is some posts on this earlier in this thread.