Internet gun puchases & taxes

Internet gun puchases & taxes

This is a discussion on Internet gun puchases & taxes within the Off Topic & Humor Discussion forums, part of the The Back Porch category; Noticing taxes are now being applied to Internet gun purchases in NC. Is this this a local thing or is your experience the same where ...

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    VIP Member Array scottync's Avatar
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    Internet gun puchases & taxes

    Noticing taxes are now being applied to Internet gun purchases in NC. Is this this a local thing or is your experience the same where you live? Just curious.
    "The Constitution shall never be construed to prevent the people of the United States who are peaceable citizens from keeping their own arms." - Sam Adams

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    Depends on the seller. I've had taxes added and have had them not for Georgia.
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    Distinguished Member Array SOS24's Avatar
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    Iím not sure if it is a national thing, but I know it is not limited to NC or guns. I live in Virginia and I have recently noticed sales taxes being added to almost all of my internet purchases.
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    Retailers just want to avoid the risk of a state assessing sales tax against them. It is a prudent move from a tax perspective, but a complete PITA.
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    I haven't encountered it locally unless the online retailer had a brick and mortar presence in the state. Amazon has distribution centers in TN, so anything come directly from a distro center gets TN tax. For Amazon providers out of state, no taxes being added.

    As for firearms purchased on line, I've never personally encountered. Bass Pro and Cabella's both have physical presence in TN. So if I were to buy from them on line, I'd get taxed. There was ONE FFL in MD I did business with that added MD taxes to transfers. I only used him once as none of the others added the MD tax.
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    VIP Member Array scottync's Avatar
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    I've backed away from a couple of purchases online recently. Both sellers didn't previously add taxes. One is a sponsor. The incentive for an online purchase is reduced - at least for me.
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    Amazon entered into agreements with many states to collect their taxes, notwithstanding their apparent lack of a physical presence, but merely due to risk of litigation. Additionally, as a no cost agreement (sans compliance costs), it gave them a better public profile as a responsible corporate citizen rather than an out of state ogre taking advantage of legal constructs.

    This has crept into the sphere of tax policy nationally, as retailers of any size want to avoid tax litigation with states, and instead just assess and remit with a few software fixes. Itís a conservative position, even if not grounded in solid technical merits.
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    Senior Member Array OneGunTX's Avatar
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    Quote Originally Posted by scottync View Post
    Noticing taxes are now being applied to Internet gun purchases in NC. Is this this a local thing or is your experience the same where you live? Just curious.

    It is worse than you think. If you work out of your home in Texas and a California company hires you do work that you perform in your home in Texas, you owe California franchise tax. Consider this:

    Now, check out California Office of Tax Appeals decision In the Matter of Blair S. Bindley, OTA Case No. 18032402 (May 30, 2019). There, a nonresident sole proprietor performed all of his services outside of California. However, some of his customers were located in California. Is that enough for the poor guy to attract California tax liability? The California taxing authorities said he was operating a "unitary" business. Therefore, his tiny business was subject to California's apportionment rules. The stateís Office of Tax Appeals said this case has precedential effect, so it is clear the Golden State can go after other non-Californians too.
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    I recently ordered a .22 mag rifle through my LGS that also has an online sales dept. The gun shipped out of LA and I paid AL state sales tax. *Side note FYI for anyone who buys precious metals like gold or silver they are exempt from AL state sales tax.
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    Arkansas has been talking about collecting taxes on internet purchases for some time. As I understand they've reached agreements with Amazon and other larger companies but are leaving the small sellers alone. Small meaning a company who does $100k or less in Arkansas now.
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    The back story sucks.



    ------------------

    Many online shoppers don't pay a state sales tax. That's going to change.


    By Craig Jarvis

    June 21, 2018 05:34 PM

    Victor J. Blue Bloomberg

    RALEIGH Online shoppers in North Carolina could soon have to pay sales tax on most of their purchases, under a ruling from the U.S. Supreme Court on Thursday.

    Big internet companies have been able to avoid collecting sales taxes on purchases unless they have a substantial presence in the state where the sales take place, thanks to a Supreme Court ruling in 1992. That has given them an advantage over brick-and-mortar stores, which do pay the tax.

    As a result, North Carolina has been losing more than $400 million a year in taxes, according to the N.C. Retail Merchants Association, which heralded the ruling.

    "Main Street retailers that employ your neighbors, pay property tax and support the little league team and high school band have long been required to collect sales tax that online stores did not, putting them at an automatic disadvantage," association President Andy Ellen said in a statement. "The U.S. Supreme court's decision will allow all retailers to operate on a level playing field."

    "It made little sense for a company with a few things in the warehouse to compete with an internet behemoth," Ellen said in an interview.

    States have been waiting for Congress or the Supreme Court to resolve the dispute, which has mirrored the growth of online shopping.

    Last year, state Sen. Tommy Tucker, a Republican from Union County, put together legislation that would establish a process for imposing and collecting tax on internet sales once the court or federal lawmakers made a decision.

    The legislation, Senate Bill 81, cleared the Senate but stalled in the House. Tucker said Thursday the bill is ready to be taken up in next year's long session, which begins in January.

    "This offers the opportunity for the state to be able to have, once again, a tax policy that is sound for everybody," Tucker said.

    It wasn't clear on Thursday whether Congress or individual states will be required to take the next step.

    The issue has been looming over North Carolina state government for years. In 2014, Amazon said it would pay sales tax in this state before it set up distribution centers here.

    Tucker's bill establishes a threshold for when online retailers have to collect and remit sales taxes. Any seller with annual gross sales of more than $100,000 in North Carolina or with 200 or more separate sales in this state annually would be required to collect sales tax.

    Sales taxes are required to be paid by consumers, but merchants find it's easier for them to collect the tax and remit it to the state. If merchants don't collect it, then it's up to the consumer to declare the purchase on income tax forms, which has been inconsistent.

    Legal history

    The legal issue goes back to 1967, when the Supreme Court ruled that a state couldn't require an out-of-state retailer to collect a use tax unless the retailer had enough contacts with the state. Beginning in the 1980s, states tried a number of tactics to recover the revenue they were losing, according to a N.C. General Assembly staff analysis.

    In 1998, North Carolina took the lead in organizing states to sign on to interstate agreements establishing uniform taxes on internet sales.

    North Dakota had tried to require a corporation that didn't have a physical presence in the state to collect and pay taxes on sales shipped into the state, and the company sued. The Supreme Court ruled against the state in 1992, upholding the requirement to have a physical presence. But the court noted the issue could be resolved by Congress passing a law.

    South Dakota, the subject of Thursday's Supreme Court ruling, passed a law requiring sellers to collect a 4.5 percent sales tax if they had more than $100,000 in annual sales or more than 200 transactions.

    In 2013, federal legislation that would have required sales tax on all purchases passed the Senate, with North Carolina senators Richard Burr and Kay Hagan supporting, but it never made it out of the House.

    Thursday's ruling fills that void by overturning the 1992 ruling in a 5-4 decision that went against Wayfair, Overstock.com and Newegg.
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    Quote Originally Posted by OneGunTX View Post
    It is worse than you think. If you work out of your home in Texas and a California company hires you do work that you perform in your home in Texas, you owe California franchise tax. Consider this:



    From: https://www.forbes.com/sites/robertw.../#6f37ec803e7f
    There are different standards, and IMHO, the California decision sounds ludicrous. Iíd tell California to go to hell, and tell them theyíre welcome to seize all of my California property. Iíll go read the decision now.

    The taxpayer litigated over less than $1,000. What a tool.
    Last edited by Rock and Glock; January 18th, 2020 at 10:33 PM.
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    My ammo suppliers have started charging sales tax on out of state purchases. Taxes along with shipping has put their prices up there with local dealers.

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    Distinguished Member Array DownInTheDark's Avatar
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    No taxes here, but we don't have sales tax.

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    Quote Originally Posted by Rock and Glock View Post
    Retailers just want to avoid the risk of a state assessing sales tax against them. It is a prudent move from a tax perspective, but a complete PITA.
    In Nebraska, the tax law says you have to report purchases from vendors that didn't withhold Nebraska sales tax. Not many people do it so that's the reason why Amazon Prime and others are taxing online purchases. Otherwise it would be a PITA for record keeping for reporting non-taxed online purchases. For those that didn't report such purchases, I'd hate to be the one they make an example of. Supposedly, the collection of online sales taxes is suppose to reduce property tax - I'll believe that when I see my property tax drops. Not holding my breath.
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