Sales Tax

Discussion in 'Bulk Reef Supply' started by CJS80, Jan 13, 2019.

  1. CJS80

    CJS80 Active Member Partner Member 2019 Hospitality Award

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    On recent orders I noticed you are charging sales tax. Is this now for all states, or is it just for a few more states than before?
     
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  2. CherryCorals

    CherryCorals Valuable Member R2R Supporter Platinum Sponsor Gold Sponsor

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    Pretty soon all of us will be charging sales tax for states where sales exceed $100,000 and/or 200 transactions.
     
  3. CJS80

    CJS80 Active Member Partner Member 2019 Hospitality Award

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    I've seen a lot more places charging tax, so I was just wondering if some new laws came into effect.
     
  4. themcfreak

    themcfreak A Surfing Starfish R2R Supporter Partner Member 2019 Reef Tank 365 Build Thread Contributor

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    I'm no tax expert, but I do know that the Supreme Court ruled last year something that essentially makes it easier for states to collect online sales tax from out of state businesses. (I know this is Wikipedia, but it serves its purpose): https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.
     
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  5. Opus

    Opus Valuable Member

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    My understanding is several states went "live" with their sales tax rules for out of state purchases on 1/1/2019. Some will be starting up over the coming months. Bad part is each state can have its own rules on minimums before collecting is required.
     
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  6. CJS80

    CJS80 Active Member Partner Member 2019 Hospitality Award

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    I feel bad for the business that have to sort and keep track of everything. Also what state gets the tax if I order form PA, but send it as a gift to my cousin in CA. I don't mind having to pay tax but if I owned a business I would have fought the unreasonable burden they have placed upon them.
     
  7. Opus

    Opus Valuable Member

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    The war has been fought. The supreme court let it be known there was a good chance they would overturn the original ruling they just needed a case before them to do it. The wayfair vs south dakota case was picked and the rest is history.

    I believe in your example that CA would get the tax. I know in the past if ordered from Dell I would get charged tax since they are located in Texas and I live in Texas. If I had the package shipped to my mom's house in Louisiana, no sales tax was charged. I don't know how PA could claim to deserve the tax since the goods never entered their state.

    If states get aggressive this could be a pain to small/medium businesses. I know where I work we seem to always be engaged in a use tax audit by 1 or more states. We spend a lot of $$$ on services that are supposed to keep our systems up to date with all the current tax rates.
     
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  8. Sleepydoc

    Sleepydoc Well-Known Member

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    I live in MN, so it's always been a given that I pay tax to BRS since they're located here, but as was mentioned above, many states are becoming more aggressive about collecting sales tax from online vendors. IIRC, there was a ruling/policy many years ago and online retailers argued that they needed the exemption to help them get started and help offset the costs of shipping. Well, it's hard to argue that online retailers need any help at this point (usually it's the opposite.) Last year, the Wayfair ruling came down and the states are taking it from there.

    To be clear, most states have laws requiring people to declare purchases and pay the tax on their own, but no one ever does so and as a practical matter, the laws are unenforcible. The states understandably want to capture the lost sales tax revenue from online sales and many of the larger online retailers like Amazon have been collecting state taxes for a while.

    I feel for the companies, too. State sales tax would be relatively easy, but there are lot of local municipal taxes that get piled on and make things very confusing. I'm willing to bet that there are services that will calculate the tax rate for a given address. Paying them on the other hand....
     
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  9. Sleepydoc

    Sleepydoc Well-Known Member

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    In general, the tax is determined by the destination - no different than if you are a resident of PA and travel to CA and buy something.

    Years ago, we were moving to and bought a house in New York. We needed a new washer and dryer for the house, so we bought it a Sears in our home state before we left and arranged for delivery to our new house in NY. Sears charged us sales tax for NY.
     
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  10. Bulk Reef Supply

    Bulk Reef Supply Valuable Member R2R Supporter Gold Sponsor Partner Sponsor 2019

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    Yep, just new laws that are coming into play. We started collecting sales tax on December 5th for the 28 states that require us to collect it. Like @Sleepydoc mentioned, the exact amount is based on the local sales tax for the destination.
     
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  11. andrewkw

    andrewkw Valuable Member R2R Supporter R2R Excellence Award Reef Tank 365 Build Thread Contributor

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    It's amazing these laws took so long to come into play. It's been at least 10 years since Canada starting charging sales tax on online orders placed out of province. Of course there are a lot less provinces then states but online shopping is much more common in the US. In the past I loved that BRS charged Canadian taxes / brokerage fees so the packages would come straight to our doors without any added fees. Nowadays though I live very close to the border so I just have my orders sent to MI. Just placed a small order for $46 and the sales tax was only $2.76 - not really much to complain about...
     
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  12. don_chuwish

    don_chuwish Valuable Member R2R Supporter Partner Member 2019 Reef Tank 365 Build Thread Contributor

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    Guess I'll be glad Oregon doesn't have a sales tax then!
     
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  13. Titleist

    Titleist Active Member

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    Unfortunately that's going to hurt online retailers then. For me, overall lower cost is the reason to purchase online. I'd love to purchase solely from my LFS, but when it comes to a new setup or any time you're spending big money on a lot of items, depending on where you live, adding on up to another 9.75% on top of your purchase is just enough to make you look elsewhere. If I'm spending 10k on a new system, I'm not overjoyed spending an addition 975 bucks for it when I don't have to.

    The argument can be made that even though you're paying retail plus taxes, the often used free shipping drops it right at your door. Well that I can live without if it means I can pay the same thing from my LFS, see the condition of what I'm getting and have their direct customer service after I take it home.

    This is the same reason I never buy from Amazon anymore. Years ago they had a pricing algorithm that would scour large online retailers for pricing to ensure they were at the lowest price. Then they changed it so it would only scour when someone clicked on an item so they could find the highest price from their competitors. Now they just flat out charge full boat retail on everything. And now I no longer use Amazon, and buy locally.

    Being honest, if I'm paying retail plus tax anyway, I'm buying local. Lower price competition is what the internet is all about, paying retail is what you go to your local fish store for. So in the end if I'm paying full boat, I'm buying from my LFS even if they have to order it. Good for my local economy, regardless of what the government wants. If state governments weren't being run into the ground financially by their own politicians they would never have even considered rewording existing laws to ensure they get more cash pumped into them.
     
    Last edited: Jan 20, 2019
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  14. Timrpn

    Timrpn Active Member

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    Where in Ontario you from?
     
  15. 408Dartfish

    408Dartfish Well-Known Member

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    We make up for it with property and gas tax out our ears. Dustin
     
  16. Reef man 89

    Reef man 89 Valuable Member

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    I live in New Hampshire and we have no sales tax. But like others have stated they make up for it in property tax.
     
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  17. andrewkw

    andrewkw Valuable Member R2R Supporter R2R Excellence Award Reef Tank 365 Build Thread Contributor

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    I'm from Mississauga, but I live middle of no where Northern Ontario now St. Joseph Island (long story).
     
  18. Timrpn

    Timrpn Active Member

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    Ah ok, I live in Sarnia. Boarder to Port Huron, MI. Thought i found another local reefer.
     
  19. don_chuwish

    don_chuwish Valuable Member R2R Supporter Partner Member 2019 Reef Tank 365 Build Thread Contributor

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    It’s true - and no revenue from out of state visitors either.
     
  20. WWIII

    WWIII Valuable Member R2R Supporter R2R Excellence Award Build Thread Contributor LMAS Member

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    So BRS has to send money to each state that is collected from each purchase? Seems like a nightmare. Why aren't the other online retailers doing this? They just hoping to not get caught, or?
     
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