Quote:
Originally Posted by Yoda
Bob, maybe you can help provide accurate advise on a sales tax issue I face with Heritage. Over several years, they have been charging me sales tax on any items successfully won. I live in Palm Beach, FL where Heritage has an office. I have disputed this charge for many years and have never received a clear explanation for their actions. The amount I have paid over the last few years totals $thousands. i have assumed that since the point of sale is in Texas, a Texas resident should have to pay the tax, fair enough, but why me in Florida where there is a 6% sales tax?
As a point of reference, I do not get charged sales tax by REA, LOTG or Scott Brockleman who is of course a Texan holding an auction in Texas.
It has reached a point where I probably will divorce myself from Heritage and focus on other, equally- trusted AH's.
Any light you could shed on this vexing problem much appreciated.
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John,
What Jim and Sean said in the two previous posts pretty much covers it. But to fully explain.............
It has always been recognized that for a state to be able to legally require a vendor/seller to have to charge, collect, and then remit sales taxes on sales they make to a customer in that same state, the seller/vendor has to have what is known as a sales tax "nexus" in that particular state. Think of "nexus" as a type or level of presence in a particular state. It has always been recognized and considered that having a physical presence in a state automatically gives a seller/vendor sales tax "nexus" in that state, so they can then be required to charge/collect/remit sales tax on any sales to that state they have "nexus" in. And physical presence is having employees, buildings, inventory, leased offices, and so on, in a state. You mentioned that Heritage has an office in Palm Beachy, so there is the physical presence in Florida that requires them to charge/collect/remit sales taxes on sales to all Florida customers, including you. This physical presence "nexus" requirement for all states in the US was then upheld and formalized in a 1992 SCOTUS ruling in the case of Quill Corp. vs. North Dakota.
The fact that Heritage made their sale out of Texas does not determine which state the sales tax is owed to. It is determined by what state they send/deliver the items being sold to. Another way to look at this, you are on vacation in Texas and walk into a store there and buy something, if applicable, you owe Texas sales tax because you completed the sale and took possession of the purchased item in Texas. However, if you instead call that same Texas store to buy and ask them to ship the same item to your home in Florida, if applicable, any sales tax due would be owed to Florida and not Texas, because Florida is now where the sale was completed upon your taking possession of what you purchased. Is that clear and make sense?
There was a further revision to the "nexus" rules as a result of another SCOTUS ruling in the 2018 case of South Dakota vs. Wayfair. This case still maintains that physical presence creates "nexus" for a seller/vendor in a particular state, but went further to recognize that an online or otherwise out-of-state seller can now also have "economic nexus" in a particular state for sales tax purposes by merely having $100,000 or more of sales, or 200 or more sales transactions, to a particular state in a single year. Not every state with a sales tax has adopted these exact same "economic nexus" thresholds as South Dakota, but a majority of them have imposed similar rules since the 2018 SCOTUS case.
Now other AHs may not be charging you sales tax right now because they have no physical presence in Florida, nor have they met Florida's "economic nexus" threshold, at least not yet. Florida set their threshold at simply $100,000 in sales for the previous calendar year, via legislation just recently taking effect on July 1, 2021. So once an outside of Florida AH hits $100,000 in Florida sales in a single calendar year, they are going to have to start charging/collecting/remitting sales tax to Florida on all Florida sales going forward, starting the calendar year after hitting that sales threshold of $100,000.
This should fully explain and answer your question. Bottom line is that Heritage is properly charging you Florida sales tax, whether you like it or not. Sorry, but nothing you can really do about it, unless you want to start using one of these "vault" services out there. Heritage has no choice and has to comply with the laws in place. Good luck!
03-24-2022, 05:14 PM
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