(Topic ID: 233111)

2019 New Pinball purchase will be taxed.


By mnpinball

3 months ago



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  • Latest reply 89 days ago by Buzz
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    #301 3 months ago

    Do you have to charge if a nexus is not setup in a particular state yet? Or if you don’t do the required volume of business in that state (by dollar amount or units)? I thought that was how it worked?

    #302 3 months ago
    Quoted from FightNightFZ:

    Do you have to charge if a nexus is not setup in a particular state yet? Or if you don’t do the required volume of business in that state (by dollar amount or units)? I thought that was how it worked?

    I'm working with my tax people to try to get some answers. Maybe some of the tax guys here can answer that for us.

    #303 3 months ago

    I have a friend who runs a local business that also ships to Tennessee and he said he doesn’t have to collect tax because he doesn’t do 500k (which is the TN nexus). I definitely don’t know anything about tax law so I have no clue.

    #304 3 months ago

    So far I have only really looked at Illinois and Minnesota since that is the bulk of my out of state business (with Iowa and texas not too far behind). From what I see in the first two is that if I (as a company) have more than 100 individual sales or $100k in sales IN A 12 MONTH PERIOD (not a calendar year) then I am supposed to collect the state's sales tax. Well, with the cost of the machines that I sell, I exceed that pretty quickly. What I dont know is if that customer base will stay with me if I have to collect sales tax while a smaller volume distributor might not have to, therefore potentially making my sales figures drop under the threshold.

    Fun time, fun times indead.

    #305 3 months ago

    Yeah that’s how I understand it too. Distributors that don’t do high volumes of business in particular states will still get an advantage if the buyer is smart enough to seek them out.

    #306 3 months ago
    Quoted from Fezmid:

    The delivery companies are paying taxes that pay for the roads they use.

    yes HUT Highway Use Tax. been doing it for years. they pay taxes for every mile they drive in every state! all started by NY

    btw sales tax is a killer for me i will not be participating in ANY nib purchases.
    i will wait and buy huo!!!

    #307 3 months ago
    Quoted from mrclean:

    So is TAXMAN on the new Beatles Pin ?

    I’ve been waiting for this all night. Now I can go to bed smiling.

    #308 3 months ago
    Quoted from KingPinGames:

    This has definitely been on my mind lately. I have lots of customers in different states, mainly for tax reasons, but also because we have built a relationship. The way I understood the law was "if I (the seller) had a physical presence in the same state as you (the buyer) then I was required to collect the sales tax. On the other hand, if you (the buyer) were located in a different state then it was up to you to pay the tax. It's not that you never had to pay the tax, it was that I just never had to collect it.
    Now, under the new laws, I'm am a glorified tax collector for the government. What does this mean for me as a distributor? Let me ask this instead. Let's say I make the 18 hour drive one way from my office to texas pinball fest. What advantages does a texas resident have to buy from me instead of from their local distributor? Other than offering extended warranties and exclusive stories about the superstar jjp designer?
    I can see this new tax collection law increasing my local sales as now I am on the same price level as guys from out of state, but I can't see a reason (other than personal) for making the business journey to far away shows. I will probably still make the trip to tpf because I like the show and they (dallas) do not have a local JJP/Spooky distributor, but (as always) I encourage everyone to buy locally to support local dealers.
    I ask the pinside crowd this. Would you still continue to buy from and out of state dealer if they had to collect sales tax from you (and charge a higher shipping rate)? I included the high shipping since shipping one game states away cost more than shipping a dozen games to my office where "local" buyers can pick them up? I have lot of pinball friends in lots of other states, but I would not blame any of them for choosing to buy locally if all else was equal.
    Lots to think about in 2019.

    I have purchased 4 NIB machines, 3 of them from JJP. I will continue to do business with JJP because of @jerseyjen. When I call her she has always taken my call and has never punted me to voicemail. I know this sounds minor but it means a lot to me. In fact all of JJP staff has been this way. In fact a few years ago my WOZ died on me; I posted it on pinside and Alex called me on a Sunday to help me. If everything is the same those who go above and beyond will win.

    -1
    #309 3 months ago
    Quoted from KingPinGames:

    So far I have only really looked at Illinois and Minnesota since that is the bulk of my out of state business (with Iowa and texas not too far behind). From what I see in the first two is that if I (as a company) have more than 100 individual sales or $100k in sales IN A 12 MONTH PERIOD (not a calendar year) then I am supposed to collect the state's sales tax. Well, with the cost of the machines that I sell, I exceed that pretty quickly. What I dont know is if that customer base will stay with me if I have to collect sales tax while a smaller volume distributor might not have to, therefore potentially making my sales figures drop under the threshold.
    Fun time, fun times indead.

    Maybe Stern will start to manufacture machines cheaper, let’s say Brazil and ship them back to the USA. Or maybe Mexico for half the cost? And keep the same prices to keep sales going strong!

    As far as distributors go, streamline costs and undercut other distributors (which may mean you take less profit) but you continue to take the sales. (Grow customer base - we call that market share).

    I feel bad for you all, cuz I see a squeeze coming on the distributors, not Stern and not much to customers. The customers will start exiting new market based on this tax increase and any Stern increases.

    Be first to take advantage of local sales and undercut (take less profit from outside WI) to compete/beat your competition.

    Next thing you know distributors who don’t adopt will fade and there will be fewer of you around which means you can monopolize (raise prices/ profits).

    Play long ball - short ball sucks coming up!

    Oh yeah, any extras you can offer for free, even remote quality support will make your distributorship the step above!

    #310 3 months ago

    NYC is Almost 10% tax. It absolutely impacts my thinking about selling my TAF and buying a NIB JJ which I had planned to do.

    I think this will somehow have a chilling effect on trade. If every legit reselling of an item has to be taxed, imagine items resold many times on eBay. It could reach 40-50 percent or more "use tax".

    It would Have been interesting to run an ai simulation of how this taxation will effect trade before doing so, as there could be an unintended consequence that occurs that is not beneficial. Imagine if it actually ends up stopping people from upgrading to buy the latest gadget. Or black markets pop up, more stuff in landfills instead of people using them, etc.

    #311 3 months ago

    Is this for real? I guess I'm lucky. I live in Oregon (no sales tax) and have a Stern/JJP/CGC distributor located about 1 mile from my house.

    #312 3 months ago

    JJP has pushed prices out of control every title they push the price up like pirates 9500$ which is insane I remember when they were at 6500$ not a bad price, but they just keep pushing the price up; now a company like CGC who maintain the same prices all the time is definitely helping us the collectors and even lowering the price on their classics to 6k which is amazing. Especially for a lot of us who like the pros. I remember when 4K would get you the full featured game but those days are long gone

    #313 3 months ago

    Will this give rise to modern day bootleggers? Pinball bootleggers that is.

    GoFundMe me a firebird tran am and find me a Snowman to drive the 18 wheeler. Cause smokey has his ears on.

    11
    #314 3 months ago
    Quoted from musketd:

    JJP has pushed prices out of control

    That statement still bugs me. It leaves out so much detail about what JJP was doing to earn that higher price, and it leaves out the actions of Stern.

    #315 3 months ago
    Quoted from shlockdoc:

    There is Betson and pinball sales to name two in New Jersey.

    According to Sterns website, there are no official dealers in Nj.

    https://sternpinball.com/find-a-dealer/

    #316 3 months ago
    Quoted from Luckydogg420:

    To throw salt on wound, here in Ontario there’s not only the 13% sales tax we pay on NIB games, but we also have to deal with fluctuating currency exchange rates.
    You plan to buy a game in 2 weeks, the dollar drops by a penny and suddenly your paying hundreds more in unexpected cost. You can plan and save for taxes, but we don’t even know what the price is until we go pay. The price is calculated that day.

    Avoid the fluctuations, buy Canadian made pins.

    #317 3 months ago
    Quoted from cpr9999:

    As far as distributors go, streamline costs and undercut other distributors (which may mean you take less profit) but you continue to take the sales. (Grow customer base - we call that market share).

    Jjp, cgc and api all have contracts with their distributors that strictly forbid these practices. Any distributor caught breaking these contracts will no longer be a distributor.

    I hope to grow local sales by having services available for local buyers. Extended warranties, in home service contracts, pinball maintenance seminars, etc. At the end of the day all distributors will have to adapt in order to survive this (and probably future) changes.

    This will not only apply to nib games. Any brick and mortar store will be collecting tax on all potential sales.

    Here's a tip for dealing with your local distributor. Trade ins will help. The value of the trade in is taken off of the price of the new game, and then tax is calculated on the remaining balance, therefore making the amount of taxes potentially collected lower. While most distributors can not offer retail prices for trade ins, the tax savings might make up (some) of that difference.

    #318 3 months ago
    Quoted from KingPinGames:

    From what I see in the first two is that if I (as a company) have more than 100 individual sales or $100k in sales IN A 12 MONTH PERIOD (not a calendar year) then I am supposed to collect the state's sales tax.

    Here's another scenario. What if I've never met either of those thresholds and I've never collected sales tax. What happens if I now hit one of them. What do I do if I've never collected the tax? I certainly can't go back and collect it from customers on past sales. Would I then have to pay it out of my own pocket?

    -6
    #319 3 months ago

    America ***
    Thanks ***

    #320 3 months ago
    Quoted from Bryan_Kelly:

    Here's another scenario. What if I've never met either of those thresholds and I've never collected sales tax. What happens if I now hit one of them. What do I do if I've never collected the tax? I certainly can't go back and collect it from customers on past sales. Would I then have to pay it out of my own pocket?

    Yeah, those are the same questions I have asked my advisors

    #321 3 months ago

    How will any given state know if or how much a distributor sold? Is this an honor system like how the consumer has already been the one to pay state tax for purchases. Unless all states are linked to electronic book keeping of your business how would anyone know what you do?

    #322 3 months ago

    Here's a pretty good read on this.

    https://blog.taxjar.com/economic-nexus-laws/

    Make all the judgments you want, but for me, what keeps me in NIB purchases is not as much the price of the pin overall, but the hit I'm willing to take whenever I decide to sell. Losing potentially ~1k or so after playing and enjoying the game for 2+ years, is acceptable to me. I consider this against other areas where discretionary funds could be spent like boats, autos, and RVs. Pinball is cheap and can be played all year and not just seasonal. However, things like shipping and taxes throws that off a bit, as those funds, generally, are not recouped on resale. So throwing another $700 plus $300 shipping on a new JJP game, already sets up a 1k loss out of the gates. I live in Missouri, which appears to have no Nexus law in place at this time, so I'm still in the same boat as before. However, once that changes, I'll have to rethink my own spending on NIB purchases.

    #323 3 months ago
    Quoted from bigdaddy07:

    Here's a pretty good read on this.
    https://blog.taxjar.com/economic-nexus-laws/
    Make all the judgments you want, but for me, what keeps me in NIB purchases is not as much the price of the pin overall, but the hit I'm willing to take whenever I decide to sell. Losing potentially ~1k or so after playing and enjoying the game for 2+ years, is acceptable to me. I consider this against other areas where discretionary funds could be spent like boats, autos, and RVs. Pinball is cheap and can be played all year and not just seasonal. However, things like shipping and taxes throws that off a bit, as those funds, generally, are not recouped on resale. So throwing another $700 plus $300 shipping on a new JJP game, already sets up a 1k loss out of the gates. I live in Missouri, which appears to have no Nexus law in place at this time, so I'm still in the same boat as before. However, once that changes, I'll have to rethink my own spending on NIB purchases.

    I'm in the same thought process as you. If I sell my DILE today, I would take a $1,000 loss which I'm okay with.

    If I bought a DILE now at $9,700, I'm now taking a massive $1,700 hit when I sell (not including $300 for shipping if you paid for it).

    1. That makes me wonder if the secondary market will see an increase in price on NIB games.
    2. I will be much more cautious on what I buy, the frequency that I buy NIB, and I will certainly hold on to my NIB longer.

    #324 3 months ago

    Could dealers start trade in programs? Say I trade in my MET and add $1000 for a NIB MUN Pro. Tax me $60 or whatever on the $1000 purchase instead of $400. Like cars.

    This could be a thing going forward?

    #325 3 months ago
    Quoted from Lermods:

    This internet tax thing is a joke. If you buy something out of state, you the consumer technically are supposed to pay sales tax to your state. Under the new law, the out of state retailer is now supposed to collect the tax and pay it with your state. It’s going to be a headache for everyone. I think the limit for a retailer is 200 transactions or $100k in revenue in any state.
    It’s just a money grab by politicians, has little to do with competition. We have no pinball brick and mortar distros or even internet distros based in NJ. The main retailers affected are the big chain stores that were being hurt by Amazon, which now collects sales tax.

    100%

    Got to keep that bloated government machine running. Getting bigger all the time.

    #326 3 months ago

    What if you buy a pin and have it shipped to your other house in a different state than your billing address. Is the tax the state it goes to?

    #327 3 months ago

    I have a hard time seeing how each state will be able to prove how much you sold in a state. The article named the big guys. When you see Amazon boxes on every door yes it's worth looking into. Would pinball or the eBay guy who sells signs even scratch the radar. States would spend more money chasing these pennies than what it's worth.

    #328 3 months ago
    Quoted from Buzz:

    I have a hard time seeing how each state will be able to prove how much you sold in a state. The article named the big guys. When you see Amazon boxes on every door yes it's worth looking into. Would pinball or the eBay guy who sells signs even scratch the radar. States would spend more money chasing these pennies than what it's worth.

    If this was a couple of decades ago, absolutely. With today’s technology, it’s not hard to connect the dots.

    #329 3 months ago
    Quoted from pinnyheadhead:

    Could dealers start trade in programs? Say I trade in my MET and add $1000 for a NIB MUN Pro. Tax me $60 or whatever on the $1000 purchase instead of $400. Like cars.
    This could be a thing going forward?

    I think your numbers are off. Dealer cost on a NIB has to be quite a bit higher than what they pay for a used trade in. With your trade in they need to shop and test it, make any repairs and provide any warranty work done themselves.

    Dealers need to stay in business so I think the number is closer to $2000 for the trade in difference. Then at that point most will chosse to sell it themselves because the market is so good on used games.

    #330 3 months ago

    For all of the small business owners here complaining about this burden, it is nothing new. In the late '80's to mid'90's I worked for a small division within Rockwell International that sold electronic data recorders and related stuff directly to trucking companies throughout North America.

    Small as we sold between $800k-2M/month so not significant. We had our own people who did accounting / billing before giving what was left to Corporate to help with the B1 bomber, Space Shuttle and Rocky Flats fiascos.

    Anyhow, we collected sales tax from each company we shipped them to based on location. J.B. Hunt, for example, has terminals all over the place so when we shipped to their Springfield, Ohio terminal, we collected 5% (remember, this was many years ago) and 4% to the Romulus, Michigan terminal. But, when we shipped to the Lowell, Arkansas headquarters, we collected 4% or whatever the rate was. We paid the sales taxes to each state quarterly after we collected it from the customers. So, this was done 30 years ago. The Rockwell Lawyers made sure we did what was legal. Even though it would be difficult to verify, but would certainly come out in a tax audit.

    Of course, we had people to do the legwork.

    #331 3 months ago
    Quoted from AFM95:

    I'm in the same thought process as you. If I sell my DILE today, I would take a $1,000 loss which I'm okay with.
    If I bought a DILE now at $9,700, I'm now taking a massive $1,700 hit when I sell (not including $300 for shipping if you paid for it).
    1. That makes me wonder if the secondary market will see an increase in price on NIB games.
    2. I will be much more cautious on what I buy, the frequency that I buy NIB, and I will certainly hold on to my NIB longer.

    I brought this up years ago and nobody wanted to take a hit for taxes paid. So I will fully expect people to ask more on the secondary market. If you pay more up front, you will want to sell for more. Unfortunately nobody cares if you had to pay more up front.

    https://pinside.com/pinball/forum/topic/whats-the-cost-of-unboxing-a-pin#post-2871412

    #332 3 months ago

    There is, and always will be an underground economy. Good luck taxing cash transactions. You can’t tax an item that doesn’t exist (nudge, nudge, wink, wink)!

    NIB sales with be hampered, for sure. I’m not even going to speculate as to how anyone’s going to get around NIB taxes.

    #333 3 months ago
    Quoted from PinLen83:

    There is, and always will be an underground economy. Good luck taxing cash transactions. You can’t tax an item that doesn’t exist (nudge, nudge, wink, wink)!
    NIB sales with be hampered, for sure. I’m not even going to speculate as to how anyone’s going to get around NIB taxes.

    They are steering us towards methods besides cash everyday. So many transactions being done with PayPal, Square, Zelle and so on. All leaves a paper trail.

    #334 3 months ago
    Quoted from branlon8:

    Taxes pay for the roads which allow the delivery trucks to bring your orders to your house. Otherwise how would you consume stuff ?

    What does your gasoline tax pay for then?

    #335 3 months ago

    Tax evasion has always been Americans #1 sport it's in our DNA. Can't wait to see people selling pins off the back of trucks in an alley at shows.

    #336 3 months ago
    Quoted from MustangPaul:

    What does your gasoline tax pay for then?

    Catered lunches for politicians of course.

    #337 3 months ago
    Quoted from Buzz:

    Tax evasion has always been Americans #1 sport it's in our DNA. Can't wait to see people selling pins off the back of trucks in an alley at shows.

    Well I mean....it's like everyone forgets why we broke away from Britain...it doesn't get more American than wanting less taxes.

    #338 3 months ago
    Quoted from bigdaddy07:

    Here's a pretty good read on this.
    https://blog.taxjar.com/economic-nexus-laws/
    Make all the judgments you want, but for me, what keeps me in NIB purchases is not as much the price of the pin overall, but the hit I'm willing to take whenever I decide to sell. Losing potentially ~1k or so after playing and enjoying the game for 2+ years, is acceptable to me. I consider this against other areas where discretionary funds could be spent like boats, autos, and RVs. Pinball is cheap and can be played all year and not just seasonal. However, things like shipping and taxes throws that off a bit, as those funds, generally, are not recouped on resale. So throwing another $700 plus $300 shipping on a new JJP game, already sets up a 1k loss out of the gates. I live in Missouri, which appears to have no Nexus law in place at this time, so I'm still in the same boat as before. However, once that changes, I'll have to rethink my own spending on NIB purchases.

    322 posts and this is the first one with any real valid info with the link. This is a serious topic for all concerned, buyers, distributors, companies...

    #339 3 months ago

    If a distributor sets up a non profit organization they can reward your $6k donation with a special pin gift. They can then deduct their operating costs and pass on the I think only 1% required profits and the recipient now has a nice charitable right off.

    #340 3 months ago

    If the taxes really bother people then pay the fee to be an amusement business and take the one time loss right off. You have 3 years to make a profit or go out of business. Learn to play in the pros with the 1%'s.

    #341 3 months ago

    Well, I just learned that AZ has no such law. So, any distro who wants to use me to stay competitive, pls contact me and let's see how we can do business.

    #342 3 months ago
    Quoted from Buzz:

    If the taxes really bother people then pay the fee to be an amusement business and take the one time loss right off. You have 3 years to make a profit or go out of business. Learn to play in the pros with the 1%'s.

    Yeah, that’s what I was gonna ask.

    Maybe Icey can answer as he is a tax guy.

    In the USA can you set up an LLC and claim the sales tax back, and claim some deprecation on your assets?

    Maybe that could be an answer for the larger collectors.

    In NZ, a business can “claim back” the sales tax (GST) on a new purchase. (Our sales tax is 15% across the board on everything). There is no sales tax on used items in NZ.

    rd

    #343 3 months ago

    Any advice for a newb that was planning buying a nib today? Should I wait? Haggle?

    #344 3 months ago

    Oh yes you can. Corporate vs LLC has better right offs for not that much difference in fees. I would not be surprised if many larger collectors have not already done this. But who would say out loud they did.

    #345 3 months ago
    Quoted from RustyLizard:

    I think your numbers are off. Dealer cost on a NIB has to be quite a bit higher than what they pay for a used trade in. With your trade in they need to shop and test it, make any repairs and provide any warranty work done themselves.
    Dealers need to stay in business so I think the number is closer to $2000 for the trade in difference. Then at that point most will chosse to sell it themselves because the market is so good on used games.

    Keep in mind the dealers do make money on the sale of a NIB. New games don't have to be "tested and shopped out" very much. Also if one sells a game on their own they would have to pay full tax on the new purchase. I think $1000 plus and LED MET could get you a NIB. There is more incentive for the buyer to do this saving $300 on taxes. Heck I would personally take $2000 and a MET and get someone a NIB Pro they want.

    A dealer in FL is actually offering a DP or IMDN Pro NIB for $535 with your SW, ACDCVE, MET LED or Kiss Pro trade in.

    My prediction is trade ins will be more of a thing going forward. Could be wrong.

    #346 3 months ago

    Look at the laws and see how these large non profit tax exempt pinball museums operate. You could in theory IMO do the same as a kind of distributor as I stated above.

    #347 3 months ago
    Quoted from srmonte:

    I have really wanted to get me a nib pin. I need to have someone else pay for it, since I cannot afford one. Please give me a step by step format on how I may achieve this goal.

    Get Mexico to pay for it!

    (But then later ask those who already knew it was a stupid idea that would never happen, have them pay for it.)

    #348 3 months ago
    Quoted from RTS:

    Get Mexico to pay for it!
    (But then later ask those who already knew it was a stupid idea that would never happen, have them pay for it.)

    Careeeeful. Surprised this thread hasn't been shut down yet, but going that direction will surely do it.

    -1
    #349 3 months ago
    Quoted from KingPinGames:

    This has definitely been on my mind lately. I have lots of customers in different states, mainly for tax reasons, but also because we have built a relationship. The way I understood the law was "if I (the seller) had a physical presence in the same state as you (the buyer) then I was required to collect the sales tax. On the other hand, if you (the buyer) were located in a different state then it was up to you to pay the tax. It's not that you never had to pay the tax, it was that I just never had to collect it.
    Now, under the new laws, I'm am a glorified tax collector for the government. What does this mean for me as a distributor? Let me ask this instead. Let's say I make the 18 hour drive one way from my office to texas pinball fest. What advantages does a texas resident have to buy from me instead of from their local distributor? Other than offering extended warranties and exclusive stories about the superstar jjp designer?
    I can see this new tax collection law increasing my local sales as now I am on the same price level as guys from out of state, but I can't see a reason (other than personal) for making the business journey to far away shows. I will probably still make the trip to tpf because I like the show and they (dallas) do not have a local JJP/Spooky distributor, but (as always) I encourage everyone to buy locally to support local dealers.
    I ask the pinside crowd this. Would you still continue to buy from and out of state dealer if they had to collect sales tax from you (and charge a higher shipping rate)? I included the high shipping since shipping one game states away cost more than shipping a dozen games to my office where "local" buyers can pick them up? I have lot of pinball friends in lots of other states, but I would not blame any of them for choosing to buy locally if all else was equal.
    Lots to think about in 2019.

    The short answer is no. I wish you luck in 2019, going forward is going to be a tougher ride.

    #350 3 months ago

    With all the knowledge people have in this community why don't we start brainstorming some solutions instead of bitching and eating each other? We have lawyers, cpa's, tax people, non profit owners, distributors, and so on. Let's all work together to get to the wizard mode.

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