Sales Tax?!?

MadReferee · Jul 8, 2004

( Mad, I have no clue about the specifics of the furniture company in NH, but MANY companies in MANY different consumer segments have in fact won court orders to audit the books of out of state companies that advertise the TAX FEE shipping out of state on consumer goods. )

New Hampshire does NOT have a general sales tax or income tax. We may have high property taxes but that is the only tax burden I have and it is alot less than what our neighbors to the north (Maine) or south (Mass) pay in total.

NH state agencies and businesses continually advertise in both the print and broadcast media that you can shop TAX FREE IN NH. It's part of our economic advantage. Prices are also lower since we do not have the overhead associated with sales taxes. We welcome out of staters to come and buy stuff SALES TAX FREE.

There are several other states with no sales tax and I can see them and NH as being the new locations for internet businessses.

NH does have compacts with several states but only to share certain very specific information that is collected by our Dept of Revenue. This mainly pertains to business profits taxes and does not give an out of state agency the right to come in and look at a companies books and receipts to check for out of state buyers. In fact, during the holiday season Mass revenuers will park outside our state run liquor stores and take license numbers of Mass people buying booze. They then radio ahead and stop them as soon as they cross the border. If these revenuers are spotted they are politely asked to leave the parking lot by the NH state police since NH does not want to loose the out of state business.

Like our state motto says, "Live Free or Die".

dhjmdls · Jul 8, 2004

Can we talk about something else? /forums/images/graemlins/smile.gif

Bob_Skurka · Jul 8, 2004

Mad, none of that absolves the purchaser from the legal obligation of paying the use tax in his home state.

As far as NH being sales tax free and that might make it attractive to internet sales companies, that is also irrelevant to the purchaser and his obligation to pay the use tax in his home state.

Use taxes are levied at the purchasers state, not the sellers state. Use taxes are equal to sales taxes in most states. The fact that NH does not have that tax is good for you if you bring goods into your state, it makes no difference to a buyer who is not a resident of a sales tax free state.

I guess to sum it up, in most states you are obligated to either pay "sales" tax or "use" tax.

jfdlaw · Jul 8, 2004

If you live in a state with a sales tax you have three choices:
1. Buy from a dealer in state and they will collect the tax;
2. Buy from a dealer out of state and pay the tax yourself;
3. buy from a dealer out of state, don't pay the tax and hope they don't catch you and prosecute you for failure to pay the tax.

I've been involved in "work outs" for businesses behind in their bills. I'll tell you that as long as you are honest, the IRS will work with you. NYS Sales Tax will file a lien, seize your assets and then let you try to get them back.

For me its not worth the risk. Everyone else can make their own decisions.

Freds · Jul 8, 2004

This is only my second full year in business for myself. Three years ago I bought a tractor in NY and didn't pay sales tax because I said it was for agricultural use. I believed I signed something, also. My accountant never questioned it and he is pretty much by the book and not as "colorfull", as he puts it, as other accountants. I just traded in and bought two tractors at the same dealer. The other dealer I was comparison shopping at is in my state, PA. Of course the dealer in PA said I had to pay sales tax anyway when he couldn't match the bottom line, but the dealer in NY said I didn't as long as it was for ag use.

Now, my gray area falls in the agricultural use thing. I own a boarding facility for pets, which falls under agricultural use for land and I pay a license fee every year to the PA Dept of Ag. Therefore I said the tractors were for maintaining my property which was purchased soley for building my kennel on. I have walking trails to maintain, fences to put up, a driveway to keep plowed for my customers, exercise areas I keep pea gravel in... I'm probably technically in the wrong, but I bet it would make for a good arguement.

I also thought they charged sales tax on Dell computers now (whoever mentioned that). That's why I leased my business pc and also why Dell runs free shipping specials all the time.

MadReferee · Jul 8, 2004

( Mad, none of that absolves the purchaser from the legal obligation of paying the use tax in his home state.

As far as NH being sales tax free and that might make it attractive to internet sales companies, that is also irrelevant to the purchaser and his obligation to pay the use tax in his home state.
)

Agreed. I never said this wasn't the case.

My point was that the NH state government agencies and private businesses encourage out of staters to buy in NH because we have no sales tax, thus making the product cheaper. NH does not care if you pay a tax to your home state or not and we will not collect it for them. That's between you and your home state. We just want your business.

Gary_in_Indiana · Jul 8, 2004

Here's another "Dealer answer" for you. In my state, through the end of last year, if you purchased from my dealership and were NOT a resident of my state we were not required to collect sales tax from you. That changed this year, however.

Now, regardless of your address, I have to collect my state's 6% sales tax. What happens from there with the other states I do not know. I'm assuming there is some provision for credits, etc., but that is just what I stated; an assumption.

As I'm only half an hour from one state line and an hour from yet another it's been quite interesting to be put in this position by my state's department of revenue. I've still not gotten an answer from them as to what I'm to do when the buyer is from another country.

Don't laugh. I sold one bound for Mexico just last week and average one or more a month heading there.

As to purchases I might make out of state as a consumer without paying sales tax, I'm not required to pay sales tax here on them, either. I am, however, required to pay 'Use Tax' which, not surprisingly, is exactly the same percentage. /forums/images/graemlins/smile.gif

Ozarker · Jul 9, 2004

What is a Use Tax? Is that something specific to your state or do we have one here in Missouri but called something else?

jayhawkRoy · Jul 9, 2004

In Missouri, believe it is called Compensating Use Tax. The info and requirement to file is in your Missouri Income Tax booklet.

8561 · Jul 9, 2004

( You might have hard time coming over the border with a umpteen thousand dollar tractor on a flatbed. Maybe... /forums/images/graemlins/crazy.gif )

You won't have a hard time at all. As long as the dealer crosses the tractor at the border towing with his truck, you're all set.