New Heritage State Sales Tax

BobC · #1 09-12-2018, 04:04 PM

Quote:

Originally Posted by Leon

My guess is that in the next 5'ish years there might be sales tax collected by all auction houses shipping everywhere.

Leon, That may depend on how big the auction houses are and what volume of business they are doing. In that South Dakota Supreme Court case, the threshold was set at $100,000 of sales activity in a single year before someone would have to start collecting sales tax on sales to SD residents, along with over 200 transactions. And that activity has to be for sales to residents of that particular state, not sales to all people everywhere.

The bigger auction houses will of course be hit. There could be some smaller AHs that don't meet such thresholds in some of the less populous states.

Bicem · #2 09-12-2018, 04:11 PM

Yep, good time to consign to the smaller guys, save ~10%.

That WA sales tax for Heritage hurts.

Lorewalker · #3 09-12-2018, 04:12 PM

Quote:

Originally Posted by BobC

Leon, That may depend on how big the auction houses are and what volume of business they are doing. In that South Dakota Supreme Court case, the threshold was set at $100,000 of sales activity in a single year before someone would have to start collecting sales tax on sales to SD residents, along with over 200 transactions. And that activity has to be for sales to residents of that particular state, not sales to all people everywhere.

The bigger auction houses will of course be hit. There could be some smaller AHs that don't meet such thresholds in some of the less populous states.

Bob,

I have read your posts on this topic and you seem to know a good deal about this. Really appreciate your insights. Sounds like they are not quite there to being able to implement this national tax due to the administrative requirements. Seems really complicated to have to now track sales by state, especially for the sellers who have only one place of business.

Thanks,
Chase

BobC · #4 09-12-2018, 06:46 PM

Quote:

Originally Posted by Lorewalker

Bob,

I have read your posts on this topic and you seem to know a good deal about this. Really appreciate your insights. Sounds like they are not quite there to being able to implement this national tax due to the administrative requirements. Seems really complicated to have to now track sales by state, especially for the sellers who have only one place of business.

Thanks,
Chase

I've been a CPA for about 40 years in Ohio, and have butted heads and been involved in sales tax audits in both Ohio and New York over the years, as well as advising people and businesses about it over the years. Some of the rules and nuances you run into regarding sales taxes are absolutely ridiculous. Sales taxes aren't going away either, and with all the technology and connectivity and internet access everyone now has, it is only going to get worse. Everyone is slowly being forced to do everything online and over the internet, making it so much easier for the various government tax authorities to watch and follow what everybody is doing.

You know, I've seen and heard all the complaining by people about sales tax in various posts and threads on this site over the years and how it isn't fair when it gets taxed to people in one state and not another, and so on. There is actually a pretty reasonable way collectors could get around it and end up possibly being exempt from sales tax altogether. It would involve a little leg work and some ongoing activity and action, but wouldn't be impossible to overcome.

I'm a firm believer in the old saying - "Tax evasion is a crime...tax avoidance is your God given and constitutional right!"

I'm buried right now trying to get returns done for businesses by the 9/17/18 extended due date, otherwise I could get into it some more. I've thought about starting a thread to explain how people who complain and don't like the sales taxes can possibly get around them entirely. Maybe after I get through the filing deadline and have some more time.............we'll see.

Lorewalker · #5 09-12-2018, 10:31 PM

Quote:

Originally Posted by BobC

I've been a CPA for about 40 years in Ohio, and have butted heads and been involved in sales tax audits in both Ohio and New York over the years, as well as advising people and businesses about it over the years. Some of the rules and nuances you run into regarding sales taxes are absolutely ridiculous. Sales taxes aren't going away either, and with all the technology and connectivity and internet access everyone now has, it is only going to get worse. Everyone is slowly being forced to do everything online and over the internet, making it so much easier for the various government tax authorities to watch and follow what everybody is doing.

You know, I've seen and heard all the complaining by people about sales tax in various posts and threads on this site over the years and how it isn't fair when it gets taxed to people in one state and not another, and so on. There is actually a pretty reasonable way collectors could get around it and end up possibly being exempt from sales tax altogether. It would involve a little leg work and some ongoing activity and action, but wouldn't be impossible to overcome.

I'm a firm believer in the old saying - "Tax evasion is a crime...tax avoidance is your God given and constitutional right!"

I'm buried right now trying to get returns done for businesses by the 9/17/18 extended due date, otherwise I could get into it some more. I've thought about starting a thread to explain how people who complain and don't like the sales taxes can possibly get around them entirely. Maybe after I get through the filing deadline and have some more time.............we'll see.

Very valid point about how some bidders, depending on where they live, will pay sales tax while others won't, placing those who pay it at a disadvantage. I suppose one way around sales tax (national or local) would be for collectors/buyers to apply for resale licenses. Most of us don't just buy so maybe some of us could justify what we do as a side business? Downside is that you save the sales tax but if you do well selling, the income tax will be several times higher.

Again, appreciate your input on this topic from an accountant's point of view and thanks for sharing thoughts again during a busy time. I am sure once this national sales tax rolls out it will be more clear.

basesareempty · #6 09-13-2018, 07:30 AM

I know most of the material going through these larger auction houses are higher end items but Does anyone think this may bring about a resurgence of the local/regional card show where Cash is King?

Bob

rainier2004 · #7 09-13-2018, 09:49 AM

Quote:

Originally Posted by basesareempty

I know most of the material going through these larger auction houses are higher end items but Does anyone think this may bring about a resurgence of the local/regional card show where Cash is King?

Bob

Only if those shows start selling whats in the auctions...

darwinbulldog · #8 09-13-2018, 10:33 AM

As someone who's been paying sales tax to Heritage for several years, it'll be nice to someday have all the bidders back on an even playing field -- or nearly even I should say. I guess the tax rates still differ from state to state.

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