New Taxes / Fees on orders.....

Discussion in 'Bulk Reef Supply' started by SnowDog, Jan 6, 2018.

  1. SnowDog

    SnowDog Active Member

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    I was very disappointed to see that BRS has started to add sales tax to my orders while other major online reefing vendors have not. I live in WA, so not sure why BRS is imposing state sales taxes and others are not.

    For me, this is a 10% across the board price increase and eliminates one of the main reasons I shopped at BRS, especially for MAP priced products like Neptune and Ecotech.

    Can you please explain the change in your policy and why BRS is required to do this where other vendors have not?

    Thanks!
    SD
     
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  2. underwaterdan

    underwaterdan Well-Known Member

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    https://dor.wa.gov/find-taxes-rates...eling-playing-field/obligation-remote-sellers

    Talk to your local politicians about it.

     
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  3. dodgerblew

    dodgerblew Valuable Member SCMAS Member

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    I don't represent BRS in any way and I don't like paying sales tax either but the reason is:

    Determining Your Sales Tax Obligations - In Other States:
    If you sell and ship taxable goods or services to customers located in other states that impose a general sales tax, then you must determine whether you have established nexus in that state. If you are deemed to have nexus, then you are required to collect that state's tax on all taxable transactions into that state. If however, an out-of-state customer comes to your state location, to pick up the goods, you would charge your state's sales tax.

    By the way, we as consumers have a legal obligation ( at least in CA ) to list any sales tax for goods not charged by the business on our state tax returns
     
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  4. Ryanbrs

    Ryanbrs Active Member R2R Supporter Platinum Sponsor

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    Hi,

    This is indeed disappointing. The state of Washington has decided it is going to take a very aggressive approach to collecting sales tax on it's residents starting Jan 1 2018. I think you will start to see this from a variety of different places you might shop online in all kinds of industries.

    To get around previous supreme court cases, they are now enforcing a new approach which provides two options. More or less Option A) report sellers can collect sales tax. Option B) they can not collect the tax, but they need to send all of the WA customer purchase data to the state of Washington so they can contact you directly to pay it. Reality is we are all supposed to pay tax on our online purchases, but almost no one does. This is how the state of WA intends on changing that. Both options are less than desirable, but of the two the state has provided there is no way we are going to select option B, even if it hurts sales. This is what we believe our customers would like us to do. However, if you feel differently we would like to hear that feedback.

    It is certainly true you can shop at a vendor who doesn't collect and pay this tax for you and some of the medium sized shops are probably not complying with the new law. However, they may just have selected option B). If you don't want sales tax collected at purchase and also don't want your purchase behavior sent to the state, I would contact the shop you plan on buying from and ask how they are complying with the new WA tax law. Note, if their response is "we are not compiling" know that if WA contacts them at a later date on this they will likely have the choice of either paying back taxes on all of these purchases or providing them all of the customer contact data and purchase behavior so the state can collect it on its own. Being on the government's radar is a less than desirable thing for most people...

    Your state is not alone in this; others are following suit. In fact, south Dakota has a request to the supreme court to revisit the entire topic. They have indicated they are likely to do so. I think what amounts to tax free shopping on the internet is likely going to see an end in the somewhat near future. States want this revenue and they are going to find a way. https://www.bloomberg.com/news/arti...ernet-tax-ruling-tees-issue-up-for-high-court

    While probably not a very satisfying answer I hope this helps to some degree.
     
    Last edited: Jan 6, 2018
  5. SnowDog

    SnowDog Active Member

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    Thanks for sharing this. Looks like the RCW changed this year. I don't mind paying the tax if it is a legal requirement and I guess the other vendors are following the option to just publish a notice that the "purchaser may be responsible for sales taxes" and not charging the buyer at the time of sale.

    This will end up benefiting our LFS businesses by leveling the "playing field" in terms of pricing and that is a good thing.
     
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  6. SnowDog

    SnowDog Active Member

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    Thanks for the thoughtful response. It makes sense and after reviewing the changes, I prefer the approach BRS is taking. The last thing I want is the state tracking my purchases and sending me a surprise tax bill at the end of the year.

    **** NOTE: Price is not the only reason I shop at BRS, and now that I understand the driver for the changes, your outstanding customer service, commitment to continuous improvement, and investments in testing products will keep me as a regular customer.

     
  7. Ryanbrs

    Ryanbrs Active Member R2R Supporter Platinum Sponsor

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    Thanks for the kind words :)
     
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  8. jduong916

    jduong916 Active Member

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    Seems like a quote straight for the BOE handbook
     
  9. jduong916

    jduong916 Active Member

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    Still don't understand how its legal. Im buying something in Wisconsin through a company that has no location or nexus or whatever in California, if anything I should pay Wisconsin sales tax not CAs. If i physically drove to WI to pick up my order I'd pay WI sales tax. Why should I have to pay CA sales tax just cause the item is shipped here. The State wants to get their hands on everything, and the state gets to make the laws not based on whats fair, but based on the presumption that this money is theirs, no ifs, ands or buts about it.
     
    Last edited: Jan 6, 2018
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  10. jduong916

    jduong916 Active Member

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    Now I got to go on a rant about taxes. I'm getting tired of politicians saying I live in a high tax state because the people of CA demand a certain standard of living. NOOOO! I didn't demand any of it, you politicians imposed it on me. I didn't get to vote on the 12 cent increase to every gallon of gas. I didn't get to vote on the yearly increase to my property taxes. I never got to vote on the salaries and pensions promised to the state worker. AHHH!! CA is killing me, but I love my state lol.

    ok (deep breathes) rant over.
     
  11. rock_lobster

    rock_lobster Valuable Member R2R Supporter

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    AGreed I'd rather option B. Just let the state send an invoice for the sales tax if they are really doing that. So far from what I have heard they are only sending tax collections for items of high value. Like if you go buy a 10,000 ATV one state over and have it shipped to you then most likely your state will send you a tax bill. but they arent coming after a 2$ tax collection on a bottle of Carbonate.
     
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  12. Ryanbrs

    Ryanbrs Active Member R2R Supporter Platinum Sponsor

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    Feedback noted. However it could be a bill, could be an audit. Just getting on any tax agency’s radar is often not a pleasant thing.

    We got sales tax Audited by MN many years back and had to pay sales tax on everything they could prove we bought and we couldn’t prove we paid tax on. It was a rediclious process that went on 9 months and eventually resulted in them oweing us because we were paying sales tax on shipping Boxes and shouldn’t have been. I’ll never get that time back though ...

    WA is getting really aggressive, arguably the most agressive in the country. I think anything is on the table here.
     
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  13. Ryanbrs

    Ryanbrs Active Member R2R Supporter Platinum Sponsor

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    They are making some logic leaps which will have to be challenged in court like advertising in the state via email or google represents nexus.

    Honestly, I really don’t think it will come to that because the court or congress is going to change things in the next few years.
     
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  14. jduong916

    jduong916 Active Member

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    Option B would be horrific for the seller, to have to keep logs of everyone buying stuff and turn that information to the each state. Well, maybe not, it's just data already stored in everyones account. However, no state would have enough resources to collect the sales tax from each individual who buys online, probable not even 1% of the public.

    I'm not saying don't pay your taxes, I just strongly believe the state tax should be charged wherever the companies headquarters is located. Not where the item is used.
     
  15. dodgerblew

    dodgerblew Valuable Member SCMAS Member

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    agree 100%! That 12 cent increase in gas tax is more like 25 cents a gallon and don't forget the DMV registration fees they arbitrarily raised without the people getting a vote. BTW, the State Senator for my area shows on his FB page that 1/3 of that gas tax and DMV fees, which we were told 100% of these increases are for roads, is not even going to roads. It's being diverted to prison related issues. Prison education comes to mind.

    I'm in CA because of my kids and grandkids. If not for them I would be gone yesterday.

    Snowdog, if you don't mind me asking, what's your sales tax rate? It's 9.5% in LA County
     
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  16. JoshH

    JoshH Valuable Member R2R Supporter Build Thread Contributor Partner Member 2018

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    Very interesting to see how items get taxed down in the states from state to state.
     
  17. SnowDog

    SnowDog Active Member

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    It varies by the municipality but is between 9.5% and 10%.
     
  18. dodgerblew

    dodgerblew Valuable Member SCMAS Member

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    It's as bad there as it is here. My daughter is in Idaho and it's 6%!
     
  19. Lowell Lemon

    Lowell Lemon Well-Known Member

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    @Ryanbrs'

    Unless the state of Washington can afford to send a team to your location you will not be audited. Oregon has an agreement with Washington to allow Oregon purchasers to buy tax free from Washington businesses by just presenting an Oregon drivers license. So I do not see them having a legal leg to stand on if challenged in court. Also you cannot enforce state laws over state lines period that is established federal law. As a Washington business owner and seller I know the number of employees in Washington States Tax offices is rather low due to their poor management in multiple other areas of the state budget. Just try to get them to answer the phone or Emails in a timely manner. The state service offices are run on a skeleton crews that are not to interested in working for a living.

    We already have the highest gasoline taxes in the country and most of us on the state line vote with our money and shop in Idaho or Oregon for fuel and don't give Olympia a dime. How do you think they will be able to enforce that across state lines without agreement from the border states? The dirty little secret is they do not have the legal athority to collect taxes across state lines period. They also do not have enough tax enforcement officers to cover our own state let alone the state of California. This is really an Olympia pipe dream and you should tell them nuts since your customer list is protected and they would have to get a court order in California to allow them access as well as enforcement across state lines. The case you had with MN illustrates the wasted effort the state made to "collect" imagined taxes from you and they lost money in the process. You should have called the local police and had them escorted from your business location. They simply have no legal standing to be in California trying collect taxes for MN and a judge in California would have told them so. Unless you have a physical location or make deliveries into the state with your own trucks you owe MN or WA nothing period. I sell across state lines every day of the week and I follow each states requirements. I have passed every audit with flying colors. I keep careful records and only allow access by each state to that infomation that concerns that state only.

    If you cave into Washington they will take your time and money believe me! Our state government is an extreme example of the principals of anti business interest running amok. It has already cost Washinton the manufacturing plants for several Boeing aircraft as well as the coporate headquarters now located in Chicago. We have a political group here that ignores the needs of the "little people" so they can continue to waste tax payer dollars any way they see fit. Our last good governer was Gary Locke but his party has run the budget into the red every year since he left.

    Please do not allow these political pirates to hold your business hostage until federal law is enacted to allow the collection of taxes for internet sales. Just watch Microsoft mount a legal challenge if Washington State tries to tax its customers around the world. You own them nothing and the law is currently on your side. Please stand your ground and I will encourage others in the state to vote against those who dreamed up this mess. This is the result of legal pot use in our state! They have had a windfall of money from pot sales and have already wasted it without meeting current fiscal obligations. They will do the same with your time and money necessary to illegally collect taxes on internet sales. This is a clear case of state government overreach peroid. Let them fight it out in your California courts or in Nevada since you warehouse there. Hire an attorney to look into their "request" before you comply.
     
  20. reefluvrr

    reefluvrr Member

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    We just need to play their 'game'. Be like the greedy corporations that set up corporations outside of the US.

    I like the idea of Bulk Reef Supply Asia branch;););).
     
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