(Topic ID: 233111)

2019 New Pinball purchase will be taxed.


By mnpinball

3 months ago



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    #501 3 months ago
    Quoted from cpr9999:

    Remember it’s a hobby. Most hobbies you loss most of your money but you create memories!

    While that is the most important part, the rise in pricing quicker than inflation along with everything being more expensive overall, and now no tax refunds anymore and taxes on internet products? I can forget buying a silly pinball machine for the foreseeable future.

    If enough of us are in similar scenarios then the number of buyers in any high end hobby will decrease quickly. Sky isn’t falling but it’s sure dropping fast!

    #502 3 months ago
    Quoted from underlord:

    While that is the most important part, the rise in pricing quicker than inflation along with everything being more expensive overall, and now no tax refunds anymore and taxes on internet products? I can forget buying a silly pinball machine for the foreseeable future.
    If enough of us are in similar scenarios then the number of buyers in any high end hobby will decrease quickly. Sky isn’t falling but it’s sure dropping fast!

    As fast as it is “dropping”, the Munsters LEs are all sold out! Must not be dropping to fast. Record sales (speculation) on Munsters.

    Maybe Stern is aiming for a different level client. However, just look at Jersey Jack prices.

    Time will tell.

    #503 3 months ago
    Quoted from cpr9999:

    As fast as it is “dropping”, the Munsters LEs are all sold out! Must not be dropping to fast. Record sales (speculation) on Munsters.
    Maybe Stern is aiming for a different level client. However, just look at Jersey Jack prices.
    Time will tell.

    Well, Munsters are almost if not at base model JJP NIB prices now. Good luck to all the LE buyers and may the Pin-Gods smile upon their purchases.

    #504 3 months ago

    Just curious if anyone who bought a new pin in 2019 has paid sales tax

    #505 3 months ago

    My Munsters LE will be sans tax. I haven’t paid past the deposit yet, but have been assured by the distributor that he won’t hit the Nexus threshold limit in my state and thus no tax required. Not sure how that plays out if things change and he does indeed hit that 100,000 threshold. Maybe he’ll just not sell any more for the year after he hits $92-94k or something like that?

    Unless I’m wrong (and I am often), many people will be abandoning their long time preferred distributors and switching to ones in far away states. With drop shipping, until the rules change, a collector in Florida could buy a pin from a distributor in North Dakota (for instance) and probably be guaranteed of not paying taxes. Not exactly sure what this will do to support, but I’ve needed minimal for any of my NIB anyway.

    #506 3 months ago

    I just spoke with a friend yesterday who believed in this tax change wholeheartedly UNTIL I explained the details of how it really works as explained by gexchange and then he totally flipped saying this is a riduclous burden and will lead to tons of problems.

    All the money is on the side of collection, there needs to be a group educating the public and writing laws that will block the states ability to pass these Nexus laws.

    My company, we have decided to limit sales to certain states which in my head sounds insane but numbers don’t lie and we can’t afford to handle the overhead of selling to everyone anymore.

    In case it sadly does stick I did buy stock in Avalara

    #507 3 months ago
    Quoted from wiggy07:

    Same here, I am taking close to a $2000 loss living in NJ...Awesome....

    Is this due to the new property write off limitations?

    #508 3 months ago
    Quoted from Pinzap:

    My Munsters LE will be sans tax. I haven’t paid past the deposit yet, but have been assured by the distributor that he won’t hit the Nexus threshold limit in my state and thus no tax required. Not sure how that plays out if things change and he does indeed hit that 100,000 threshold. Maybe he’ll just not sell any more for the year after he hits $92-94k or something like that?
    Unless I’m wrong (and I am often), many people will be abandoning their long time preferred distributors and switching to ones in far away states. With drop shipping, until the rules change, a collector in Florida could buy a pin from a distributor in North Dakota (for instance) and probably be guaranteed of not paying taxes. Not exactly sure what this will do to support, but I’ve needed minimal for any of my NIB anyway.

    Hmm...wait, maybe I misunderstood it. Are you saying that the limit is per each state they sell to, not a total of the distributors business? That makes a world of difference.

    #509 3 months ago
    Quoted from Zablon:

    Hmm...wait, maybe I misunderstood it. Are you saying that the limit is per each state they sell to, not a total of the distributors business? That makes a world of difference.

    Yes. That’s exactly what I’m saying (If I understand it correctly). And it’s going to be a nightmare for small business. And as I said really cut into sales from large distributors who in the past did lots of sales in each state close to them.

    #510 3 months ago
    Quoted from PinLen83:

    Is this due to the new property write off limitations?

    I am not a CPA so add info or correct
    me. That is fine

    From what I understand the State and local taxes, SALT, is now capped out at a $10,000 deduction. So if you pay $7000 in property tax and $7000 in state income tax you can only apply $10,000 Federal tax deduction instead of $14,000.

    On the flip side standard deductions were doubled. So now if you file married joint return it is $24000, so you would need to deduct over $14,000 more over if you reached $10,000 total income and property tax to make it worth while to itemize.

    So I view it as - the higher standard deduction will be good for folks who do not have a lot of deductions or could itemize in the past but not a huge amount.

    It will not be as good if you pay high property taxes and state income taxes to add along with your mortgage interest, charity contributions etc.. NY, NJ tax payers who have homes may take a little hit or not. That does suck, but on the other side - why should the federal govt heavily subsidize a state just because it has high property and income taxes?

    #511 3 months ago
    Quoted from pinnyheadhead:

    I am not a CPA so add info or correct
    me. That is fine
    From what I understand the State and local taxes, SALT, is now capped out at a $10,000 deduction. So if you pay $7000 in property tax and $7000 in state income tax you can only apply $10,000 Federal tax deduction instead of $14,000.
    On the flip side standard deductions were doubled. So now if you file married joint return it is $24000, so you would need to deduct over $14,000 more over if you reached $10,000 total income and property tax to make it worth while to itemize.
    So I view it as - the higher standard deduction will be good for folks who do not have a lot of deductions or could itemize in the past but not a huge amount.
    It will not be as good if you pay high property taxes and state income taxes to add along with your mortgage interest, charity contributions etc.. NY, NJ tax payers who have homes may take a little hit or not. That does suck, but on the other side - why should the federal govt heavily subsidize a state just because it has high property and income taxes?

    Because we subsidize the rest of the country. Ny and nj pay way more in taxes than we get back in federal funding.

    As for SALT. taxes, I said this earlier, the AMT impact will now be substantially lower. Much of the deductions we were all taking were being offset by the AMT. With deductions capped, the AMT wont come into play for most people, at least not to the extent it was.

    #512 3 months ago
    Quoted from PinLen83:

    Is this due to the new property write off limitations?

    Len, yes now that the deductions on property and house are only $10,000 hurt me, also other things that I was able to deduct in the past are now gone this year.

    13
    #513 3 months ago

    So here is what I see based off The homework we have done with our accountant.
    The 2 states to stay out of are OK and PA: 10K plus in a year and you're filing taxes... so one game and your done... so those of you living in Oklahoma and Pennsylvania you're screwed. Maybe if you buy one game a year early in the year you'll find a dealer to do it.

    MOST states adopted the ruling of the Supreme court but some altered. REMEMBER ALL OF THIS IS A ROLLING CALENDAR YEAR so at the end of each quarter you go back one year from the END OF THAT QTR.
    100K in sales OR 200 transactions: IN,IA,KY,IL,LA,ME,MD,MI,NE,NV,RI,NJ,NC,ND,SD,UT,VT,WA,DC,WV,WY,WI,CA,CO
    100K plus in sales: SC
    100 or more retail sales shipped to the state or 10 or more retail sales totaling more than 100K shipped to the state during 12 consecutive months: MN
    250K AND 200 transactions AND active solicitation: CT
    250K OR 200 transactions: GA
    250K plus: AL,MS
    500K AND 100 transactions: MA
    500K plus: OH,TN,TX
    NO TAX UNLESS YOU HAVE A PRESENCE, A REP OR AFFILIATE IN THIS STATE: AZ,AK,FL,KS,MO,NM,NY,VA
    NO TAX AT ALL NO MATTER IF PRESENCE OR NOT: AK,DE,MT,NH,OR

    #514 3 months ago

    Thanks Kurt, that follows along with most of what we have found too. it's going to be an adjusting year for both consumers and dealers.

    #515 3 months ago
    Quoted from Hemispheres:

    So here is what I see based off The homework we have done with our accountant.
    The 2 states to stay out of are OK and PA: 10K plus in a year and you're filing taxes... so one game and your done... so those of you living in Oklahoma and Pennsylvania you're screwed. Maybe if you buy one game a year early in the year you'll find a dealer to do it.
    MOST states adopted the ruling of the Supreme court but some altered. REMEMBER ALL OF THIS IS A ROLLING CALENDAR YEAR so at the end of each quarter you go back one year from the END OF THAT QTR.
    100K in sales OR 200 transactions: IN,IA,KY,IL,LA,ME,MD,MI,NE,NV,RI,NJ,NC,ND,SD,UT,VT,WA,DC,WV,WY,WI,CA,CO
    100K plus in sales: SC
    100 or more retail sales shipped to the state or 10 or more retail sales totaling more than 100K shipped to the state during 12 consecutive months: MN
    250K AND 200 transactions AND active solicitation: CT
    250K OR 200 transactions: GA
    250K plus: AL,MS
    500K AND 100 transactions: MA
    500K plus: OH,TN,TX
    NO TAX UNLESS YOU HAVE A PRESENCE, A REP OR AFFILIATE IN THIS STATE: AZ,AK,FL,KS,MO,NM,NY,VA
    NO TAX AT ALL NO MATTER IF PRESENCE OR NOT: AK,DE,MT,NH,OR

    Thanks for this great summary... will be added to the Key Post list soon I suspect.

    #516 3 months ago
    Quoted from Hemispheres:

    So here is what I see based off The homework we have done with our accountant.
    The 2 states to stay out of are OK and PA: 10K plus in a year and you're filing taxes... so one game and your done... so those of you living in Oklahoma and Pennsylvania you're screwed. Maybe if you buy one game a year early in the year you'll find a dealer to do it.
    MOST states adopted the ruling of the Supreme court but some altered. REMEMBER ALL OF THIS IS A ROLLING CALENDAR YEAR so at the end of each quarter you go back one year from the END OF THAT QTR.
    100K in sales OR 200 transactions: IN,IA,KY,IL,LA,ME,MD,MI,NE,NV,RI,NJ,NC,ND,SD,UT,VT,WA,DC,WV,WY,WI,CA,CO
    100K plus in sales: SC
    100 or more retail sales shipped to the state or 10 or more retail sales totaling more than 100K shipped to the state during 12 consecutive months: MN
    250K AND 200 transactions AND active solicitation: CT
    250K OR 200 transactions: GA
    250K plus: AL,MS
    500K AND 100 transactions: MA
    500K plus: OH,TN,TX
    NO TAX UNLESS YOU HAVE A PRESENCE, A REP OR AFFILIATE IN THIS STATE: AZ,AK,FL,KS,MO,NM,NY,VA
    NO TAX AT ALL NO MATTER IF PRESENCE OR NOT: AK,DE,MT,NH,OR

    Great information, thank you for sharing.

    Can I ask a question using a scenario below?

    Since I'm in MN, and let's say historically you never hit 100 transactions or 100K+ in sales in a rolling calendar year in my state as a distributor.

    I buy a NIB game from you.

    Would you need to collect a sales tax even if you have never hit 100 trx or 100K + in sales during a rolling calendar year (and you make an educated guess that you won't go over in the next 12 months)? Or would you be collecting it anyway in case you went over the threshold? Maybe that's completely up to a distributor to decide?

    It's a shame the government is essentially penalizing small businesses to invest more money and resources to keep up with the different collection laws in each state. What a headache.

    #517 3 months ago

    There is a prime opportunity here for someone to open a distributorship in Delaware. Quite a few tax states within an easy drive of DE.

    -1
    #518 3 months ago
    Quoted from Hemispheres:

    NO TAX AT ALL NO MATTER IF PRESENCE OR NOT: AK,DE,MT,NH,OR

    looks like these are the states where distributors should set up?

    Only distributor I know of off the top of my head that is from any of those states is Rob Anthony whom is a Spooky distributor (Montana is his home state I think?). Does that mean I could avoid sales tax if I order future Spooky games through him?

    #519 3 months ago
    Quoted from JodyG:

    There is a prime opportunity here for someone to open a distributorship in Delaware. Quite a few tax states within an easy drive of DE.

    This is exactly what I would do. My in-laws live in Delaware so if I am going to be charged sales tax, I’ll just have the game delivered to them and go pick it up.

    Something is going to have to change, the burden of all of this on small business is way too high.

    #520 3 months ago
    Quoted from PinLen83:

    Is this due to the new property write off limitations?

    Not only property tax and interest write off limitation.

    Really it’s state and local income tax we used to be able to deduct. That could be tens of thousands of dollars. We are being taxed on income we never see because it’s deducted for state income tax. Some states have 8-12% income tax.

    Here is a quote for a $500k earner in California this does not include home interest deduction or property tax deduction that you would lose as a result of new tax law. The loss of interest and property tax deduction would add thousands of more Federal 2018 taxes. ADD58E60-9590-4CF6-ACA5-244036415AE5 (resized).jpeg

    #521 3 months ago
    Quoted from Whysnow:

    looks like these are the states where distributors should set up?
    Only distributor I know of off the top of my head that is from any of those states is Rob Anthony whom is a Spooky distributor (Montana is his home state I think?). Does that mean I could avoid sales tax if I order future Spooky games through him?

    No, you would need to live in one of those 5 states

    #522 3 months ago
    Quoted from rai:

    Not only property tax and interest write off limitation.
    Really it’s state and local income tax we used to be able to deduct. That could be tens of thousands of dollars. We are being taxed on income we never see because it’s deducted for state income tax. Some states have 8-12% income tax.
    Here is a quote for a $500k earner in California this does not include home interest deduction or property tax deduction that you would lose as a result of new tax law. The loss of interest and property tax deduction would add thousands of more Federal 2018 taxes. [quoted image]

    That’s because the Democrats have ruined California with insanely high income and property tax, why should we all subsidize that? The new limits make sense.

    Oh and mortgage interested deduction didn’t go away. You can still claim that if you itemize, and just like before it’s not capped.

    #523 3 months ago
    Quoted from Whysnow:

    looks like these are the states where distributors should set up?
    Only distributor I know of off the top of my head that is from any of those states is Rob Anthony whom is a Spooky distributor (Montana is his home state I think?). Does that mean I could avoid sales tax if I order future Spooky games through him?

    no, even the states that don't have sales tax will still have to collect it from the states that do. technically, even if you cross the border into a no sales tax state and bring the game back to your state (that does have a sales/use tax) you are still responsible for declaring that.

    #524 3 months ago
    Quoted from KingPinGames:

    no, even the states that don't have sales tax will still have to collect it from the states that do. technically, even if you cross the border into a no sales tax state and bring the game back to your state (that does have a sales/use tax) you are still responsible for declaring that.

    Nobody does though. Thats why there is a Best Buy and shopping malls right on the PA/DE border. Everyone runs down there to buy TV's and whatnot. And I guarantee 99% of them are not remitting fair use tax on their PA returns. PA does have tax free clothing though...so maybe we can find a way to wear the machine out of the store!

    #525 3 months ago
    Quoted from WackyBrakke:

    mortgage interested deduction didn’t go away. You can still claim that if you itemize, and just like before it’s not capped.

    That’s *if you itemized*. Now since state, local and property tax are no longer able to be deducted you can’t itemize any more because that is the majority of what people use to get over the standard deduction. Meaning most people won’t itemize even if the do have mortgage interest.

    As for losing the ability to claim state tax as a deduction. The way I see it is we never see this money. It’s not part of our take home pay yet we still have to pay taxes on that portion it’s almost like a double tax (pay tax on money that is tax).

    #526 3 months ago

    Some instances state income taxes will increase because they use AGI meaning after deduction so if you can no longer itemize then your AGI is higher an so you’ll pay more state tax than you would have prior.

    Unless the states do a work around a states could end up with bonus tax collection as a consequence.

    #527 3 months ago
    Quoted from Whysnow:

    looks like these are the states where distributors should set up?
    Only distributor I know of off the top of my head that is from any of those states is Rob Anthony whom is a Spooky distributor (Montana is his home state I think?). Does that mean I could avoid sales tax if I order future Spooky games through him?

    Where the distributor is based out of his irrelevant. It's where the product is shipped.

    #528 3 months ago
    Quoted from Whysnow:

    looks like these are the states where distributors should set up?
    Only distributor I know of off the top of my head that is from any of those states is Rob Anthony whom is a Spooky distributor (Montana is his home state I think?). Does that mean I could avoid sales tax if I order future Spooky games through him?

    No, all these laws are based on where the consumer lives as in where we the distributor ships the product too. Pick the state you live in on the list I provided and that is the law for that distributor no matter where said distributor is located.

    #529 3 months ago
    Quoted from Hemispheres:

    No, all these laws are based on where the consumer lives as in where we the distributor ships the product too. Pick the state you live in on the list I provided and that is the law for that distributor no matter where said distributor is located.

    so for WI "100K in sales OR 200 transactions"

    That means I should try to find a distributor that is < the above and they wont have to charge sales tax?
    then if they hit that threshold later in the year, I could go find a new distributor?

    #530 3 months ago
    Quoted from AFM95:

    Great information, thank you for sharing.
    Can I ask a question using a scenario below?
    Since I'm in MN, and let's say historically you never hit 100 transactions or 100K+ in sales in a rolling calendar year in my state as a distributor.
    I buy a NIB game from you.
    Would you need to collect a sales tax even if you have never hit 100 trx or 100K + in sales during a rolling calendar year (and you make an educated guess that you won't go over in the next 12 months)? Or would you be collecting it anyway in case you went over the threshold? Maybe that's completely up to a distributor to decide?
    It's a shame the government is essentially penalizing small businesses to invest more money and resources to keep up with the different collection laws in each state. What a headache.

    We would not "need" to no. if we're projected to hit the hundred thousand in four quarters then I would assume Distributors would start collecting. I would think most of us will just stop doing business in those states to avoid the hassle. The one thing I haven't asked is if we charge our regular state sales tax in our sales do we even have to deal with the tax from other states. So hypothetically if we're reaching the 100K threshold in your state if I just charge Illinois sales tax (where we are located) on your sale I don't have to deal with the Minnesota sales tax. That I'm unsure of.

    I'm not overly worried about this except for the couple of States I mentioned above. For the most part most of us won't be hitting these marks there's a couple states that I'm probably close so we'll just have to watch. it is a big pain in the ass. None of these numbers are etched in stone and can ebb and flow and change at anytime. There's also a ton of different dates of when these go into effect or had been in effect. You have no idea the amount of mind-boggling information we have to go through to make sure we're in compliance with this mess. And at these margins? I scratch my head sometimes.

    #531 3 months ago
    Quoted from Whysnow:

    so for WI "100K in sales OR 200 transactions"
    That means I should try to find a distributor that is &lt; the above and they wont have to charge sales tax?
    then if they hit that threshold later in the year, I could go find a new distributor?

    For the most part you're correct. The crappy thing as a distributor is if we go three quarters and we haven't collected the tax on all those sales in your state for example, and now we're going to hit the threshold in your state all that tax that we did not collect will be due. We can't simply go back to you and say oh you owe the tax now. You have no idea that headaches this creates for us. we literally have to monitor every state we do business in now. Some larger Distributors just may choose to start collecting tax in every state there is tax to avoid the possibility of breaking the threshold in that state. I don't know. I do know based on the numbers that we do that there's definitely distributors out there that are breaking these thresholds. Especially those that do a lot of small transactions that will break the 100 or 200 transaction number.

    -1
    #532 3 months ago

    oh yes, I agree

    this whole thing is a complete goat rodeo.

    It is obviously intended to screw over small businesses and make it harder to do business while also collecting more tax for the big boys up top to then give back to their friends.

    #533 3 months ago
    Quoted from Whysnow:

    It is obviously intended to screw over small businesses and make it harder to do business while also collecting more tax for the big boys up top to then give back to their friends.

    It's intended to simply make sure the stream that is taxed doesn't go away...

    Online sales continue to cannibalize localized sales... meaning the tax base the state has continues to shrink - this is simply trying to make sure the base they are taxing doesn't slip past them.

    This is simply states catching up to capturing this stream, that previously they were refrained from capturing. The problem is collecting and filing taxes is not trivial, and the burden of complexity falls on the business that wants to do business in many states.

    And hence why the simplest solution for businesses is simply to limit how many states they want to do business with... vs the idea of 'borderless' economies.

    #534 3 months ago
    Quoted from Hemispheres:

    The one thing I haven't asked is if we charge our regular state sales tax in our sales do we even have to deal with the tax from other states. So hypothetically if we're reaching the 100K threshold in your state if I just charge Illinois sales tax (where we are located) on your sale I don't have to deal with the Minnesota sales tax. That I'm unsure of.

    Reciprocity today for sales and use tax obligations are very specific and almost always require bi-directional agreements, etc. So I wouldn't expect that to be a escape route as of yet.

    #535 3 months ago
    Quoted from Hemispheres:

    We would not "need" to no. if we're projected to hit the hundred thousand in four quarters then I would assume Distributors would start collecting. I would think most of us will just stop doing business in those states to avoid the hassle. The one thing I haven't asked is if we charge our regular state sales tax in our sales do we even have to deal with the tax from other states. So hypothetically if we're reaching the 100K threshold in your state if I just charge Illinois sales tax (where we are located) on your sale I don't have to deal with the Minnesota sales tax. That I'm unsure of.
    I'm not overly worried about this except for the couple of States I mentioned above. For the most part most of us won't be hitting these marks there's a couple states that I'm probably close so we'll just have to watch. it is a big pain in the ass. None of these numbers are etched in stone and can ebb and flow and change at anytime. There's also a ton of different dates of when these go into effect or had been in effect. You have no idea the amount of mind-boggling information we have to go through to make sure we're in compliance with this mess. And at these margins? I scratch my head sometimes.

    Thanks for responding and giving everyone a distributor's viewpoint.

    #536 3 months ago
    Quoted from rai:

    That’s *if you itemized*. Now since state, local and property tax are no longer able to be deducted you can’t itemize any more because that is the majority of what people use to get over the standard deduction. Meaning most people won’t itemize even if the do have mortgage interest.

    Yeah, but that is offset by the massive rise in the std deduction. If you made 80k a year, and paid 5% state income tax... that's 4k in income tax you are losing in deductions... but the standard deduction went up nearly 6k. They are still getting bigger gain from the standard deduction.

    People under the income tipping point still do better even if not itemizing. But of course those who pay a ton of state tax are worse off... but with 11,700 bump in deduction.. it's families with AGI over 200k in a 5.x% Maryland setup that are more exposed. Obviously many below that threshold will like the new deduction, even if it means no itemizing.

    #537 3 months ago
    Quoted from Hemispheres:

    For the most part you're correct. The crappy thing as a distributor is if we go three quarters and we haven't collected the tax on all those sales in your state for example, and now we're going to hit the threshold in your state all that tax that we did not collect will be due. We can't simply go back to you and say oh you owe the tax now. You have no idea that headaches this creates for us. we literally have to monitor every state we do business in now. Some larger Distributors just may choose to start collecting tax in every state there is tax to avoid the possibility of breaking the threshold in that state. I don't know. I do know based on the numbers that we do that there's definitely distributors out there that are breaking these thresholds. Especially those that do a lot of small transactions that will break the 100 or 200 transaction number.

    What a headache. If I understand correctly, there maybe some business that charge tax (assuming they would get to the threshold)...but don’t make the threshold and thus keep the money that they charged to the customers (me) as tax (giving it back to the customer would be a logistic nightmare). On the other hand, if they don’t charge the tax and reach the threshold, the business would be on the hook to pay tax they didn’t collect, thus losing $1000s +.

    #538 3 months ago
    Quoted from dnapac:

    What a headache. If I understand correctly, there maybe some business that charge tax (assuming they would get to the threshold)...but don’t make the threshold and thus keep the money that they charged to the customers (me) as tax (giving it back to the customer would be a logistic nightmare)

    They would file the tax - keeping it would be an accounting nightmare (and possible legal mess). This basically leaves them with the idea of

    1- don't collect and risk crossing the threshold.. or..
    2- collect and file, even if not mandatory... or...
    3 - don't do that business in the first place

    #539 3 months ago
    Quoted from flynnibus:

    They would file the tax

    Meaning give the collected tax (even if not needed due to threshold not being met) to the state? If that’s correct...the states win big time...they will get taxes collected when taxes shouldn’t have been collected. Not slamming what the small business needs to do, but this seems like the states way to collect tax that isn’t needed legally.

    #540 3 months ago
    Quoted from dnapac:

    Meaning give the collected tax (even if not needed due to threshold not being met) to the state? If that’s correct...the states win big time...they will get taxes collected when taxes shouldn’t have been collected. Not slamming what the small business needs to do, but this seems like the states way to collect tax that isn’t needed legally.

    The tax was always supposed to be "collected". Everything you purchase has your state sales tax on it. Most people just chose not to pay it. The tax collected from a distributor is still the tax you were supposed to pay.

    #541 3 months ago
    Quoted from Monk:

    The tax was always supposed to be "collected". Everything you purchase has your state sales tax on it. Most people just chose not to pay it. The tax collected from a distributor is still the tax you were supposed to pay.

    Oh yes, you are correct.

    #542 3 months ago
    Quoted from dnapac:

    Meaning give the collected tax (even if not needed due to threshold not being met) to the state? If that’s correct...the states win big time...they will get taxes collected when taxes shouldn’t have been collected. Not slamming what the small business needs to do, but this seems like the states way to collect tax that isn’t needed legally.

    You're looking at it wrong. The thresholds are about EXCEPTIONS -- not when the tax applies or not... meaning the tax itself is always legal and expected. The exceptions exist to establish practical limits so that small timers don't get buried. It's not a case of "the tax only exists if..." -- its "this business does not need to participate if its smaller than..."

    This whole tangent is not introduced by recent changes... it's just a problem exaggerated for the businesses by the idea of dealing with many states.

    This whole problem is actually created because such an economy has built up IN THE LOOPHOLE... not that the principles are now somewhat new. It's a challenge of how to retrofit long standing ideas, onto a model that has built up while being able to ignore them previously.

    It's not over... the current interpretation really is not practical and will hinder economic growth. So ultimately it will have to be addressed again.

    #543 3 months ago

    This whole thing is a complete mess. Funny how it was designed to protect small businesses and now it’s going to do the complete opposite.

    #544 3 months ago
    Quoted from flynnibus:

    You're looking at it wrong. The thresholds are about EXCEPTIONS -- not when the tax applies or not... meaning the tax itself is always legal and expected. The exceptions exist to establish practical limits so that small timers don't get buried. It's not a case of "the tax only exists if..." -- its "this business does not need to participate if its smaller than..."
    This whole tangent is not introduced by recent changes... it's just a problem exaggerated for the businesses by the idea of dealing with many states.
    This whole problem is actually created because such an economy has built up IN THE LOOPHOLE... not that the principles are now somewhat new. It's a challenge of how to retrofit long standing ideas, onto a model that has built up while being able to ignore them previously.
    It's not over... the current interpretation really is not practical and will hinder economic growth. So ultimately it will have to be addressed again.

    Ah yes, this is correct. As a consumer, we have, for so long, seen purchases from out of state entities that don’t have a physical presence in our state as “tax free”. And this way of thinking has been incorrect. I know ignorance is not a good excuse, but many don’t realize they were suppose to voluntarily pay the tax on their out of state purchases...I’ve never had my accountant ask, at tax time, if I made any out of state purchases this past year, and what the total was so I can pay my tax on it. But I understand now that there was no good way to enforce the tax due until now.

    #545 3 months ago
    Quoted from Lermods:

    This whole thing is a complete mess. Funny how it was designed to protect small businesses and now it’s going to do the complete opposite.

    Which is what usually happens when Government gets involved.

    #546 3 months ago
    Quoted from dnapac:

    I’ve never had my accountant ask, at tax time, if I made any out of state purchases this past year, and what the total was so I can pay my tax on it.

    My accountant has. Now whether you are honest with the response is a different question.

    #547 3 months ago
    Quoted from dnapac:...I’ve never had my accountant ask, at tax time, if I made any out of state purchases this past year, and what the total was so I can pay my tax on it.

    I do my own taxes and it's clearly right there...although I have found the language a bit confusing (Mich).

    #548 3 months ago
    Quoted from Jerryuop:

    As far as I’m concerned, my local, state, and federal government haven’t done a damn thing to earn any taxes from me in the last 20 years. I vote against every new tax, but I’m surrounded by morons out here in California.

    If you think you're surrounded by morons now, just think what it would be like if taxes didn't fund free K-12 education!

    I think about this sometimes when I drive past one of those CalTrans "Your tax dollars at work!" signs on the freeway, just how ignorant people are about what their taxes do. And I mean that in a really broad sense, both good and bad, for all sides of the aisle.

    Like, if you're a "taxation is theft!" style person, maybe there are a lot of things you take advantage of from taxes that might at least make you appreciate it some if you considered it. Beyond the obvious stuff like roads and a fire department, but those too of course.

    Alternately, if you're more of a "we're all in this together!" person, and think everyone paying in for the greater good is a worthwhile system, what percentage of your taxes really go towards things you'd consider to be the greater good? Does the average person even know? I doubt it!

    IMO the problem is that the system is just so damn complicated. And I'm going to pitch you a flat tax scheme or something, but how the hell is anyone supposed to actually understand this stuff? It's hard enough to even explain to the average citizen how marginal tax rates work, and that's the easy part! If the system was clearer, it was more obvious who was and wasn't paying their fair share, and the benefits and downsides were easier to grasp I think we'd make smarter decisions. And appreciate what we get out of it more afterwards. Maybe we'd be happier and argue with each other less, money and taxes are definitely a 3rd rail in politics, just look at this thread.

    Problem is neither side really wants anything to be easy to understand (at the top decision maker level, not normal citizens). Some groups like the confusion, makes it easier to get favorable treatment for their pet causes. Lower taxes on the rich or whatever. Other side wants to just keep adding on, even if well meaning, and making the damn thing denser and messier. Either way the documents just keep getting thicker.

    And that's how we end up with this garbage. I weep thinking about JJ's post. Like I'm a lefty, put me more in the "we're all in the together" bucket, I dig things like roads, and I'd love it if our healthcare mess could be sorted out better. But how the hell is what he has to deal with now better for anyone? All these states, all these tax regions, and one small business is supposed to keep track of it all? That's insanity.

    All I know is just looking at the hobby itself, I agree with the people who said this is gonna drive the secondary market up. The price you pay is the price you think about when you sell. If you paid an extra $600 because of taxes, and everyone else is doing the same thing, that's the new price of the game. And human nature says nobody like to lose more than they have to on selling. Fair or not, left or right in your politics, whatever, it's hard to not see that being the new reality.

    #549 3 months ago
    Quoted from dnapac:

    Ah yes, this is correct. As a consumer, we have, for so long, seen purchases from out of state entities that don’t have a physical presence in our state as “tax free”. And this way of thinking has been incorrect. I know ignorance is not a good excuse,

    Its the classic case of 'conditioning' - people have been conditioned through repetition that "this is the way things are supposed to be" - even if it's not accurate.

    The whole online economy has been able to take advantage of this "tax free" model, but it was never going to be sustainable forever. It's like gas taxes and electric credits. People are conditioned to think electric vehicles should get more benefits and not pay 'gas tax'.. but those exceptions exist today because today those choices are about encouraging a type of behavior, not because electric vehicles should inherently be tax free. As the gas tax revenue continues to go down... the government isn't going to simply say "oh, no more gas tax... darn" - they will change the taxing model to something that recoups those dollars.. like use based taxes, or more taxes on car registration, etc.

    As online sales continued to grow and cannibalize the in-person retail sale the POS sales tax collection model was going to change eventually.

    The question here is what will happen first?

    A) Will states and the fed work out some simplified collection/distribution model?
    B) Will businesses change so that they won't do business everywhere... and instead focus on their most important markets?
    C) Will a dominate broker/payment system be rolled out that will affordably make it so businesses can abtract this and simplify their reporting?

    My guess is actually a hybrid - Big states will realize the best path to collecting the money is to make it EASIER to have businesses report and submit payments. They will try to streamline the business licensing and tax processes to make submissions easier.

    In the meantime, businesses will stop being 'universal' and focus on their prime markets.

    And once enough states get smoother on their online stuff... an Amazon/Google/Paypal like company will roll out ecommerce/ERP platforms for businesses as a cloud service that will streamline it and make it easy... for a slice of the action.

    #550 3 months ago

    I live in NH. Maybe I should become a distributor.

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