2019 New Pinball purchase will be taxed.

(Topic ID: 233111)

2019 New Pinball purchase will be taxed.


By mnpinball

77 days ago



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  • Latest reply 59 days ago by Buzz
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    #551 65 days ago

    So... Minnesota has no tax on clothing. Can you offer me a $5000 discount on a new pin with the purchase of a "$5000" T-shirt?

    #552 65 days 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, 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.

    It asks straight out in TurboTax if I made any out of state purchases that were not taxed.

    #553 65 days ago
    Quoted from flynnibus:

    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.

    This sounds like a good company to buy stock in at an early time...assuming it’s publicly traded. Something to look for in the future.

    #554 65 days ago
    Quoted from pinnyheadhead:

    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?

    I'm obviously biased living in one of those high property tax, high sales tax states. But the general thinking in the past has been that from a federal perspective those states contribute more. Not trying to get political by talking about red and blue states, just using them as a convenient breakdown: generally blue states pay out more than they take in federally, and red states take in more than they pay out. So the federal government isn't really subsidizing anything, the system already has that balance set.

    Quoted from tacshose:

    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.

    Yeah, that's the problem, even if you're a pro-tax kind of person, or at the very least if not "pro" think they're a necessary evil, it's pretty hard to support this system. It's just so burdensome in stupid ways. Choking out small businesses is a terrible idea, whatever is motivating it.

    #555 65 days ago

    Ha! Got home for lunch and was telling my wife about this. She takes care of all money/taxes, etc...heck, I don’t even know when I get paid. She said that our tax booklet (we fill out before going to the accountant) always asks if we have purchase over the Internet/mail order. She checks “yes”, but they have never asked for a total. I’m so clueless...

    #556 65 days ago
    Quoted from Aurich:

    Yeah, that's the problem, even if you're a pro-tax kind of person, or at the very least if not "pro" think they're a necessary evil, it's pretty hard to support this system. It's just so burdensome in stupid ways.

    Well it's the same "this is too hard..." situation that lead to the creation of things like the EU..

    You're dealing with moving between different sovern realms.. it's gonna have friction.

    What if instead of sales tax at sale... states simply taxed the shipping companies for each shipment They already operate in the areas they are delivering..

    #557 65 days ago
    Quoted from dnapac:

    Ha! Got home for lunch and was telling my wife about this. She takes care of all money/taxes, etc...heck, I don’t even know when I get paid. She said that our tax booklet (we fill out before going to the accountant) always asks if we have purchase over the Internet/mail order. She checks “yes”, but they have never asked for a total. I’m so clueless...

    This is where it gets a little fuzzy for me as well. The way I think it works is there is a safe harbor amount you can give the state and they will tax that amount rather than add up all your small online purchases. I don't believe the safe harbor amount works for purchases over something like $1,000 (not sure on the actual amount). If you have a single item purchase over the $1,000 you have to claim that separately and pay tax on it. This is the way I understand it, but could be way off base.

    #558 65 days ago
    Quoted from flynnibus:

    You're dealing with moving between different sovern realms.. it's gonna have friction.

    For sure, but JJ's breakdown of what he has to deal with is just beyond what's reasonable IMO. If there was say a single rate for an entire state for out of state purchases and you just had to track the states that would be enough headache already, but subdividing into all the fiefdoms is just crazy to manage.

    I used to do my own taxes, but once I incorporated it was just too gnarly to deal with and I got a CPA. Watching what he does with the numbers vs what I used to do is like we're in two totally different worlds.

    I'm fine with the concept of taxes, IMO modern society needs a pooled system to function, the free market doesn't solve everything. But the burden of the system sucks, it's needlessly byzantine and ends up hurting more than it should. And I realize it's easy to say that and something else to even begin to fix it.

    #559 64 days ago
    Quoted from underlord:

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

    It doesn't matter what state set up shop in..... it matters what state you ship to!

    #560 64 days ago
    Quoted from Hemispheres:It doesn't matter what state set up shop in..... it matters what state you ship to!

    Dream crushed...

    -1
    #561 64 days ago
    Quoted from dgpinball:

    Here's a interesting angle that I don't think has been discussed. I live very close to the US border, so I take advantage of the much lower cost of shipping internally in the US and get all my parts sent to a package depot there and then I pick them up and bring them thru the border and pay the Canadian taxes.
    What I'm wondering is, now with these new rules will a company have to charge me the state tax based on the destination of the shipment, or will it be exempt because it is ultimately ending up in another country where the seller has no jurisdiction? This scenario will also come into play for people who live near state borders, ie Washington/Oregon.
    So I guess the question is will the tax be applied on the basis of where you live. (billing address), or on where the goods are shipped to, (shipping address) just another complication in what looks like a real mess!!

    Well, first off this shouldn't even be an issue because there is no US dealer that should be selling you games. It'll only be a matter of time before they get caught if they are. I sold a game to a customer who ended up selling it to somebody and the game ultimately ended up in a European country. Stern came back to me asking for verification that I sold that game in the US to a US citizen. They take that VERY seriously As they should to help protect their dealers in those countries.

    #562 64 days ago
    Quoted from underlord:

    Dream crushed...

    You probably would be a successful distributor locally in the Northeast, just not countrywide.

    #dreams_uncrushed

    #563 64 days ago
    Quoted from KerryImming:

    Minnesota has no tax on clothing. Can you offer me a $5000 discount on a new pin with the purchase of a "$5000" T-shirt?

    why not?
    who determines whether a t shirt is worth $1, $550, or $5,000?

    https://www.neimanmarcus.com/p/gucci-mens-chateau-marmont-t-shirt-prod216800068?childItemId=NMN5V1B_&navpath=cat000000_cat000730_cat2880735_cat6170734&page=0&position=9&uuid=PDP_PAGINATION_846735548bd26f4036cd7817e5c8b75b_L3Yj24ui5v9Xj--Rr6rs79CG

    #564 64 days ago
    Quoted from Hemispheres:

    Well, first off this shouldn't even be an issue because there is no US dealer that should be selling you games. It'll only be a matter of time before they get caught if they are. I sold a game to a customer who ended up selling it to somebody and the game ultimately ended up in a European country. Stern came back to me asking for verification that I sold that game in the US to a US citizen. They take that VERY seriously As they should to help protect their dealers in those countries.

    I’ve bought several NIB Stern games and I can 100% assure you that not once have I provided proof of US citizenship or the final destination of my game to any of my dealers.

    Wait... I think I just made the “watch list”.

    #565 64 days ago

    So...............................................

    When does this take effect? I'm thinking about ordering a game in full now and paying the bill off fast to avoid sales tax before it's too late.

    #566 64 days ago
    Quoted from NPO:

    So...............................................
    When does this take effect? I'm thinking about ordering a game in full now and paying the bill off fast to avoid sales tax before it's too late.

    It says in the post above that Florida is not a state where the distributors from other states need to collect sales tax unless they have a store/presence there.

    Post #513:

    https://pinside.com/pinball/forum/topic/2019-new-pinball-purchase-will-be-taxed-/page/11#post-4789252

    #567 64 days ago
    Quoted from DCFAN:

    It says in the post above that Florida is not a state where the distributors from other states need to collect sales tax unless they have a store there/presence there.
    Post #513:
    https://pinside.com/pinball/forum/topic/2019-new-pinball-purchase-will-be-taxed-/page/11#post-4789252

    Thank goodness. Now I can save up for MBr CE with cash and not worry about that or taking a kick in the junk for paying with a CC to avoid the sales tax. Appreciate that!

    #568 64 days ago
    Quoted from NPO:

    So...............................................
    When does this take effect? I'm thinking about ordering a game in full now and paying the bill off fast to avoid sales tax before it's too late.

    and this is why I am now a tax collector.

    Technically you have NEVER been able to "avoid the sales tax." Most of us just don't put it down on our taxes (which is why the government is making businesses, small and large, become their agents).

    There are certain states where I will not make enough sales to have to collect the tax, but that could change as people start avoiding the really large distributors in favor of the smaller ones that don't sell the same volume. At some point, it will either level out and everyone will be collecting sales tax, or there will be 10 distributors per state so that none meet there minimum selling quota. Only time will tell, but as a small business owner, I can tell you that there were not enough hours in the day all ready to do everything that needed to get done. Now I need to find the time to curb sales to stay under the radar or spend a day or two each quarter deciding how many more games I can sell in each state before I pass their threshold.

    I am certainly not blaming you NPO or calling you out as I have lots of clients that buy from me since I am out of state for the same exact reason that you have. Hell, I even do the same thing when shopping online for an item. If there is an eBay seller in my state, and another one out of state, I used to buy from the out of state to "save" that 5.5% sales tax. Times are changing and it really sucks for the "little guys."

    FYI, I don't (haven't) sell many games in the state of Florida, so I am pretty sure that I will not be collecting sales taxes for that state, but I also do not accept credit cards at this time. If you would like to order a game and send me a certified bank check, I will sell it and let you know that "Even though I don't have to collect the sales tax, you are still responsible for declaring it on your personal taxes. If you decide not to declare it, that is between you and the government.... for now."

    Well, I need to get to bed (to stare at the ceiling while I can't sleep thinking about what this "out of state tax collection" will do to my business and my customers.

    #569 64 days ago
    Quoted from Hemispheres:

    Well, first off this shouldn't even be an issue because there is no US dealer that should be selling you games. It'll only be a matter of time before they get caught if they are. I sold a game to a customer who ended up selling it to somebody and the game ultimately ended up in a European country. Stern came back to me asking for verification that I sold that game in the US to a US citizen. They take that VERY seriously As they should to help protect their dealers in those countries.

    Perhaps I should have been clearer, I'm not concerned about buying a NIB machine, I would buy thru Nitro if I was, I'm more concerned about parts orders from Marco, PBL, PBR etc.

    From what I've read since then, it seems unlikely that they will exceed the limits, so it shouldn't be an issue, but the question still remains, is the tax to be paid based on the state the item is shipped too, or where the buyer resides?

    #570 64 days ago
    Quoted from dgpinball:

    Perhaps I should have been clearer, I'm not concerned about buying a NIB machine, I would buy thru Nitro if I was, I'm more concerned about parts orders from Marco, PBL, PBR etc.
    From what I've read since then, it seems unlikely that they will exceed the limits, so it shouldn't be an issue, but the question still remains, is the tax to be paid based on the state the item is shipped too, or where the buyer resides?

    They will collect based on where the product ships to or where the sale takes place if in person. the persons own tax liability is their own thing to sort if shipping and their home are not the same taxing authority.

    #571 64 days ago
    Quoted from Aurich:

    I'm obviously biased living in one of those high property tax, high sales tax states. But the general thinking in the past has been that from a federal perspective those states contribute more. Not trying to get political by talking about red and blue states, just using them as a convenient breakdown: generally blue states pay out more than they take in federally, and red states take in more than they pay out. So the federal government isn't really subsidizing anything, the system already has that balance set.

    Yeah, that's the problem, even if you're a pro-tax kind of person, or at the very least if not "pro" think they're a necessary evil, it's pretty hard to support this system. It's just so burdensome in stupid ways. Choking out small businesses is a terrible idea, whatever is motivating it.

    A tax debate on a pinball forum??! Why not! First off, blue and red states weren’t always necessarily that color. If your state politicians were particularly esteemed or powerful, you got some good deals. Then you have state poverty levels, elderly, deep water ports,... Big states have big economies, and their high state tax keep more from fed govt.
    Anyway, I am intrigued. So two Americans making an awesome living- Dude and Bob

    Mississippi.- 5% tax. Cali- 13%. Is that right? Top rate 13% in California?
    Before Trump-
    Dude makes $10m in Cali- $1.3 M to state, $3.5m to Fed +3% AMT~$3.75m. Total tax $5m
    Bob makes $10m in Miss- $500k to state, $3.8m to Fed+3% AMT ~$4.1. Total tax $4.6

    After Trump-
    Dude $1.3m to state, $3.7m to Fed 3%AMT~ $4m. Total tax $5.3
    Bob $500k state, $3.7m to Fed 3%AMT~ $4m. Total tax $4.5

    Yes, I used basic rates~40% top fed, then 37%. It isn’t accurate, good enough for debate purpose. Miss. gets 40% budget aid, Cali gets 26%- California does have huge budget, and almost 20x amount of millionaires. 600k more millionaires- maybe $50k taken from Fed then 600k x $50k from Fed = $30B loss in Fed money intended for all US that went to Cali instead. Miss. got maybe $9B in fed aid- total. So who got the better deal?? South Carolina!! or Alaska

    Actually, anybody in this range have some real numbers? What am I missing?
    It seems Dude needs to get out of Cali. Wow, those Trump millionaires- not in high tax states- must be ecstatic! Another $100k on $10m in earnings...which will probably be lost in the other deductions given up.

    #573 64 days ago

    Please remember gang, we are trying to stay off politics as best we can in this thread and keep the issue discussed focused on the sales tax.

    There has been lots of good and helpful information in this thread that is pertinent to our hobby so we want this discussion to continue. If you feel a need to discuss the income tax or government spending or politicians and their various issues...then please try and refrain. If someone ignores this request and starts talking about politicians and government spending and the worthiness of government to even harvest a tax, don’t respond to them and compound the political discussion.

    Anyway, this is an important thread to many people. The more people understand about the sales tax and collection and what not the better so please keep up the discussion and ask question relating to the online sales tax if you have questions.

    #574 64 days ago
    Quoted from dgpinball:

    Perhaps I should have been clearer, I'm not concerned about buying a NIB machine, I would buy thru Nitro if I was, I'm more concerned about parts orders from Marco, PBL, PBR etc.
    From what I've read since then, it seems unlikely that they will exceed the limits, so it shouldn't be an issue, but the question still remains, is the tax to be paid based on the state the item is shipped too, or where the buyer resides?

    Got it. Well, if you are technically an out-of-country resident and they're hitting their threshold I would assume you still don't pay tax because you don't reside in any of the states but that's just speculation and something I would probably have to ask my accountant.

    #575 64 days ago

    I wonder how this will be enforced. Companies do not report their sales by state to the IRS or local authorities. Will it be the same as the use tax, which is near impossible to enforce? The IRS doesn't care where you sell products within the US, they just want your total sales and that you paid proper federal tax. Is NJ, for example, going to audit a company in another state? No way they have resources to track, let alone audit a company in another state. Do NJ authorities even have jurisdiction over companies in another state?

    #576 64 days ago
    Quoted from Lermods:

    I wonder how this will be enforced. Companies do not report their sales by state to the IRS or local authorities. Will it be the same as the use tax, which is near impossible to enforce? The IRS doesn't care where you sell products within the US, they just want your total sales and that you paid proper federal tax. Is NJ, for example, going to audit a company in another state? No way they have resources to track, let alone audit a company in another state. Do NJ authorities even have jurisdiction over companies in another state?

    Like most regulation... it will be enforced by fear of consequences and sampling to make examples of people.

    Wouldn't take much to generate enough information to generate warrants/subpoenas. So they keep doing a sampling to scare everyone else straight.

    NJ will have jurisdiction because of the law being violated.. and the SOTUS basically saying they can enforce it.

    And given this is all online... it wouldn't take much for states to start automatically 'shop' online, see who collects tax or not in the shopping carts, and then compare with likely candidates in their business records. Then it's just a matter of bubbling up who you want to go after as your example... and invest in those. Rinse and repeat.

    #577 63 days ago

    So any tax pro's here wanna give me your take on this? I am reading this that IF we had registered by 3/18 we could have just gone option 2 "Comply with Pennsylvania’s notice and reporting requirements" meaning the purchaser is well notified that they owe the tax and were clear and free? Gotta message into my CPA... but the wording on this page is a bit confusing. I think it means if we plaster the website, the invoice and send an annual report to the PA buyer then were off the hook for the tax and it's still on the buyer?

    Option 2 - Notice and Reporting Requirements

    If a remote seller elects to comply with the notice and reporting requirements, it must take the following actions starting April 1, 2018:

    Post a notice on the sales forum that states:
    Pennsylvania sales or use tax may be due in connection with the purchase and delivery of tangible personal property to Pennsylvania individuals and businesses.

    The purchaser is required to file a use tax return if tax is due in connection with the purchase and delivery in the Commonwealth.

    This notice is required pursuant to the provisions of the Tax Reform Code of 1971. 72 P.S. § 7213.2.

    Provide a written notice on all invoices, order forms, sales receipts or similar documents, whether in paper or electronic form, to each purchaser at the time of each sale that states:
    Pennsylvania sales tax was not collected on this sale. Therefore, you may be required to remit use tax directly to the Commonwealth on your purchase if the items are subject to Pennsylvania sales tax. Please visit this link to learn more about your use tax obligations under Pennsylvania law.

    No statement that sales or use tax is not imposed on a transaction may be made by a remote seller, unless the transaction is exempt from sales and use tax, pursuant to Article II of the Tax Reform Code or other applicable Commonwealth law.

    Provide an annual report to the purchaser that states:
    A remote seller making an election to comply with the notice and reporting requirements must submit an annual report by January 31 of each year to the purchaser that includes the following.

    [Name of remote seller] did not collect sales tax in connection with your transactions. You may be required to remit use tax to the Pennsylvania Department of Revenue. Following is a list by date, type and purchase price of each product, purchased or leased by the purchaser from this remoter seller, and delivered to a location within this Commonwealth.

    [Insert list]

    https://www.revenue.pa.gov/GeneralTaxInformation/Tax%20Types%20and%20Information/SUT/MarketPlaceSales/Pages/Remote-Sellers.aspx

    #578 63 days ago
    Quoted from Hemispheres:

    So any tax pro's here wanna give me your take on this? I am reading this that IF we had registered by 3/18 we could have just gone option 2 "Comply with Pennsylvania’s notice and reporting requirements" meaning the purchaser is well notified that they owe the tax and were clear and free? Gotta message into my CPA... but the wording on this page is a bit confusing. I think it means if we plaster the website, the invoice and send an annual report to the PA buyer then were off the hook for the tax and it's still on the buyer?

    This is all referring to the existing PA law. PA was already a 'notice and report' state... starting last year. This was something that has been possible since the prior SOTUS decision in 2017... and PA's law went into effect in the Spring of 2018. This is compliance sellers were ALREADY expected to comply with. https://www.salestaxinstitute.com/resources/pennsylvania-enacts-notice-and-reporting-requirements-and-economic-nexus-legislation

    Several states (11 or so before the Wayfair decision) had such laws on the books... again with varying requirements.

    But that notice&report requirement for PA has been superseded by new requirements published by PA this month. See - https://www.revenue.pa.gov/GeneralTaxInformation/TaxLawPoliciesBulletinsNotices/TaxBulletins/SUT/Documents/st_bulletin_2019-01.pdf

    Basically.. if you exceed the $100k gross sales limit, or other criteria to mean you have an economic nexus in PA - the prior 'notice & report' option is no longer available, and you must collect taxes.

    So for PA,
    - If you sell more than 10k into the state.. you are required to 'notice and report' OR collect tax.. effective 2018
    - If you sell more than 100k into the state, you are required to register and collect tax on transactions that occur AFTER July 1 2019 and notice&report is no longer sufficient

    Signed,
    Not a CPA but an avid researcher

    #579 60 days ago

    Someone Asked how will my state know.. States have gotten smart.. California and a few other states require Freight companies to submit monthly list of all shipments that are delivered within there state. Must have Size, Weight, Dims, Description,value if avail, Customer Name, Address, and phone number or both receiving party and shipping party.. So Lets say they see 15 pinball machines from me.. they can send demand records or audit me. If I refuse per the supreme court the can sue us for all back taxes, fees and interest.

    It sucks, someones going to try and skate and get caught and owe a TON of back taxes.. Say $150k x 8% is $12k plus fee's and interest. I'm guessing many of the smaller distributors are going to decide its not worth doing it any more.

    JJ

    #580 59 days ago
    Quoted from Gexchange:

    States have gotten smart.. California and a few other states require Freight companies to submit monthly list of all shipments that are delivered within there state.

    brutal. how bout someone who would like to see the country getting an rv with a toy hauler and travel from distro to distro, making 'special' deliveries along the way ? otherwise, sounds as though its time for everyone to come clean.

    nexxus01.jpg
    #581 59 days ago
    Quoted from greenhornet:

    sounds as though its time for everyone to come clean.

    I think this is the best course of action.

    Quoted from Gexchange:

    It sucks, someones going to try and skate and get caught and owe a TON of back taxes.

    I don’t think this sucks, if you avoid the law and get caught, it’s on you, no one should feel sorry for you.

    #582 59 days ago
    Quoted from greenhornet:

    brutal. how bout someone who would like to see the country getting an rv with a toy hauler and travel from distro to distro, making 'special' deliveries along the way ? otherwise, sounds as though its time for everyone to come clean.

    This sounds like the Smokey and the Bandit reboot we all deserve!

    #583 59 days ago
    Quoted from Gexchange:

    Someone Asked how will my state know.. States have gotten smart.. California and a few other states require Freight companies to submit monthly list of all shipments that are delivered within there state. Must have Size, Weight, Dims, Description,value if avail, Customer Name, Address, and phone number or both receiving party and shipping party.. So Lets say they see 15 pinball machines from me.. they can send demand records or audit me. If I refuse per the supreme court the can sue us for all back taxes, fees and interest.
    It sucks, someones going to try and skate and get caught and owe a TON of back taxes.. Say $150k x 8% is $12k plus fee's and interest. I'm guessing many of the smaller distributors are going to decide its not worth doing it any more.
    JJ

    I agree with this. It's so tempting to simply not report your purchases. I mean, no one does, but the state isn't going to come after you for $50 in taxes on your <$1k in combined purchases throughout the year. An $8k pinball machine will certainly start to cross that threshold, and if you can afford an $8k pinball machine you should be able to afford the $500 in taxes on it. Hell, most people here probably spend hundreds on little things that makes their machine look pretty.

    #584 59 days ago
    Quoted from Luckydogg420:

    I think this is the best course of action.

    I don’t think this sucks, if you avoid the law and get caught, it’s on you, no one should feel sorry for you.

    Yep, I'm not willing to risk it. That's why we are looking into compliance software ect. Others will play a bit more fast and loose

    #585 59 days ago

    Understandable to me for not wanting to get in trouble. Hopefully this and rising prices don't kill your business or the love for the silver ball. Hell even the secondary market is getting crazy when it comes to prices.

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