Tax Mistake

[dgood1]

GS,

My crop is pine trees. I have over an acre that is planted in rows. I don't think I will be able to harvest them for another 5-9 years.

 

[BigDave]

The tax-free status for interstate purchases is federal law, and your local taxing authority can't tax that purchase. Each year there is debate in Congress to repel the law; the states are losing potential revenue. Don't think you are getting a free ride, they will raise some other tax-rates to make up for the lost revenue. If they ever get the law repelled, and they probably will, it will mark a large spending boom the state legislatures.

Remember, the taxman cometh and the taxman taketh away. Hopefully, he will leave only with your money. /w3tcompact/icons/laugh.gif

 

[bmac]

Big Dave, by "tax-free status on interstate sales", can I assume you are refering to those purchases made via the internet? Obviously, it does not apply to tractors and (in my state) automobiles. Also, as most companies have some sort of web presence, its hard to distinguish between tradional mail order companies and the dot coms that this law was intended to benefit. So, does the tax exemption apply to orders phoned in to out-of-state vendors (say, for items seen in a catalog)? Or is it strictly for internet commerce?

 

[bgott]

I went 'round and 'round with New Holland over that when I bought my manuals. They ever so graciously have decided to collect the sales tax even though it's not required. I bet the reason they do that is that they get to float your money for 3 to 6 months. Hey, it's the American way! Screw your customer coming and going. That's probably one for the ethics thread.

 

[BigDave]

Interstate commerce, internet or mail order, is tax free. The key is how you receive your merchandise. This is part of the definition of interstate commerce. I will claim, if you mail order a tractor and have it shipped to you, then it could tax free, that is if you state doesn't consider it taxable property (like a car.) I assume some TBNers have experienced this with gray market tractors. If you order something from another state, and go pick it up yourself it is taxable possibly in both states. Since, laws are written by lawyers, there is some room confusion. If New Holland has dealships in your state in which you could have purchased the manuals, they chose to collect the tax. You could have driven down the road and purchased the manuals. Generally, the retailer knows how the rules apply to them, so pay the taxes if they require them.

I'm not a legal expert, but I've been mail ordering for more than 2Oyrs, so these laws predate internet commerce.

 

[DUMBDOG]

Internet, mail order may be considered interstate commerce. but if the state that you live in has a sales and use tax, it is considered a taxable purchase in your state and subject to a use tax rather than the sales tax. It would make no difference if it was a vehicle subject to those taxes or not, it would be considered used in that state and subject to reporting and subject to tax.

Most people do not report these purchases, if any do at all. There is no way for the states to track these purchases, but if there was a way, they would.

 

[Hank]

<font color=blue>A Ha! Experimental Crops! Even better yet. May even qualify for a federal grant, not just a sales tax exemption.</font color=blue>

Even better still, a federal subsidy for *not* growing them/w3tcompact/icons/smile.gif

 

[buppy69]

In NC, if you go out of state to buy a used car, NC used to charge you sales tax on that car when you bought your NC tags. People got to griping (rightfully so) that sales tax was paid on that car when it was sold new. NC agreed and changed the name of the tax from sales tax to road use tax. Same amount, different name.

I buy my Yanmar parts out of SC because that is the closest dealer to me. He has never charged me sales tax because I live out of state.

Eugene

 

[Soundguy]

A schedule 'f' is the report of profit or loss from farm activities for the irs.. goes in with your 1040, whatever version you are using.

Strictly speaking, that is for comercial ventures. For instance, if you want to get the ag exemption on your property tax, the municipal taxing authority will probably want to see that you are filing a schedule 'f' on your taxes. However there are many other situations where smaller farms, and hobby farms get tax breaks without all the paperwork.

For instance, at least here locally in horse country, most if not all horse products are tax free.
Some things like stall bedding is still taxed, but feed and hay aren't.
And as for my tractor, the dealership just needed to know if I had -any- livestock, and if my land was a-1.

Your millage may vary from location to location.. even within a state. Heck, I called our local tax collectors office to find out about getting an occupational license for my farm ( felt I should try to be 'legal'), and was told that I didn't even need one. And also, if I only sold on-site produced crops or animals, that I didn't need a retail sales license either, But that if I bought and resold for instance, horse tack, I would need the retail sales license for that.... Interesting laws, and exceptions...

Soundguy

"schedule F on my federal return. When I said, "Huh, what's that?" He said never mind and put the sales tax on the invoice. I guess that is what they use in Illinois to determine if you have to pay sales tax. "

 

[Anonymous Poster]

Hi,

I don't think this was mentioned above...if I missed it, sorry...

In PA, if you order something from a business in another state, and that business has a presence in PA, like an office or store, the vendor that sells the item [from the other state] must collect the PA sales tax on the purchase.

All the other states are probably just like ours.

I know for sure this holds true for things like computers and cameras and such. I wonder why a non-titled tractor would be any different than say a high end home theater system that could cost as much?

Come to think of it, I think we are required to pay sales tax on everything we buy in or out of state. It is just that the state cannot track things like cameras, and nickle dime items. If they could they would!

I am pretty sure that the law is simply that the seller in one state is not REQUIRED to COLLECT the sales tax on items that are sold to purchasers who are out of state, when the item is shipped to them.

If you go to another state and buy something, try getting them not to charge you sales tax because you are not a resident. Won't happen! [yes, it has happened but rarely...]

I think one word sums up the tractor tax question. They...

Gotya' /w3tcompact/icons/frown.gif

Bill