Sales Taxes...GOTCHA

[stuart]

I believe I would not sign any form, nor pay any sum of money to anyone at this time. I might contact my dealer on phone and advise them how upset I am and that I expect them to pay any sums they did not collect from me when I purchased the tractor. Perfectly reasonable to assume that the dealer reduced his price by the amount of the tax in order to make the sale. They are ultimately responsible to make sure they have collected the tax and remitted it to the State. You are not. If the State sends you this notice I would deal direct with them.

 

[puter]

Duane -

It occurs to me, if you're thinking about buying additional implements, that this is a great time to go shopping. Consider going back to the dealer, and in a non-confrontational, non-public way suggest "things didn't work out the way we hoped." Then, offer to pay the sales tax (make sure you get your corrected invoice) but tell him there's a few additional things you need and that you'd like them at cost.

You end up paying the tax you owe but have it at least partially offset by the margin of your additional purchases, the dealer doesn't have any out-of-pocket expenses and the state goes away happy. Perhaps most importantly, you salvage what may prove later to be an important dealer relationship...

 

[zuiko]

Dont forget in this whole thing that they may have already paid that amount to the state. Another reason not to go blindly sending in a check to the state.

 

[texaslandman]

TXDON, I was at a dealer in Tyler TX the other day, he quoted me a tractor price. I said, I guess that is plus sales tax. He said, no tax, it is farm use. I said, I think I'd have a hard time proving farm use.

He said you have 7.5 acres and grow vegetables in your garden for human consumption, that will pass the test!

Do you know the TX rules on qualifying for sales tax exemption for farm use?

Oh, by the way, I'm trying to buy a 20-30 HP tractor.

Gary

 

[riptides]

Whoa!

I'd have to say the final say in land use is what is recorded on the platt at the court house. Don'tch think?

My whole surrounding area is farms, and zoned RA rural agricultural. But my development is residential. Even though we have horses and barns and critters and tractors.....

Sigh..........
-Mike Z.
/forums/images/graemlins/confused.gif

 

[frank_f15]

</font><font color="blue" class="small">( He said you have 7.5 acres and grow vegetables in your garden for human consumption, that will pass the test!
)</font>

don't think that would hold up, think the dealer is just trying to make a sale with that line, once he puts that on the invoice , he is just doing what u told him "your are a farm" not for him to prove it one way or the other, so u would be stuck holding the bag. pay the tax or take a chance , your choice!

 

[Rick Jay]

puter,

I think your idea to get a good deal on implements sounds like an interesting compromise, assuming he needs the implements and that the dealer will play along.

I just hope the dealer collects the tax on the implements! /forums/images/graemlins/grin.gif

~Rick

 

[Rick Jay]

drcollie,

I'm sorry to hear that you found yourself in this predicament. I've been following this thread since you first posted it, but I've been a bit hesitant to comment. I've been ridiculed in the past for pointing out to folks that such sales are not "tax free". If you live in a state with a "use tax", which I believe is every state with a sales tax, you will owe a tax on its purchase.

Massachusetts has included the "Use Tax" line on the state income tax return as of last year. I have no idea what "behind the scenes" data exchange goes on with the various state D.O.R.'s and businesses, but it has to be something that is getting easier and easier to track, especially on big ticket items.

I can't offer any specific advice, but I echo the recommendations of not trying to play games with the state Dept. of Revenue. In their eyes, you're guilty until proven innocent and they can make your life miserable.

Best wishes for a painless resolution to this problem.

~Rick

 

[BillG_in_TX]

Gary,
From the Texas Sales Tax Exemption FAQ page:

<font color="brown">6. What are exempt uses?

Generally, it means that there are certain uses of a product that are exempt from sales and use tax. For example, the sale of a tractor is taxable, but the sale is exempt if the tractor will be used in commercial farming. It is the certain use of that tractor that makes the sale exempt.

Farmers and ranchers are not generally exempt from sales and use tax. Some materials and equipment are exempt if used for farm or ranch purposes. Some examples include animals, seeds, feed for farm and ranch animals, machinery and equipment if used for farming or ranch work.
</font>

I think two tests that would be applied by the tax auditor are: 1) Do you have an ag exemption on the land? and 2) Do you sell what you produce?

 

[jfdlaw]

<font color="blue"> I believe there is a legitimate difference between an Internet Purchase, which I believe in most states does not require sales tax </font> .

<font color="black"> </font> I don't believe the above statement is true. Most states want you to pay a sales tax on anything you buy, but will give you a credit for sales tax you paid in another state. If you bought something in a 5% state and brought it home to your 8% state, your state would expect you to pay the 3% difference.

Here in NY they just amended the state tax returns to include a line for sales tax for items purchased over the internet for which tax was not collected by the seller. They even suggest an annual amount based on your gross income if you didn't keep track last year. I'm guessing entering $0 almost guarantees an audit. I'm entering the suggested annual amount just to keep the state away.