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Thread: Planning a Big Purchase ?

  1. #1

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    Default Planning a Big Purchase ?

    If you are planning to make a significant purchase this year from an "on-line vendor", perhaps you should get it done by mid-June.
    The law that allows the internet to be a tax-free zone is under review by the US Supreme Court.................probably this April with a ruling by late June.

    The "Quill" case was the ruling in 1992 that established a business had to have a physical "nexus" in order to be required to collect the sales tax.
    Physical nexus means that the business must have a physical presence in your state.

    A new South Dakota case ("Wayfair") challenges that definition with an alteration...............in South Dakota, the law changed the term physical nexus to business nexus.
    If you have X amount of business in South Dakota, then you are required to collect and remit taxes. This definition was created to be in direct obvious conflict with Quill and start a new fight in court in order to get the old ruling overturned..................one reason is internet sales have grown beyond any anticipated rate:

    In 1992, when Quill was the new ruling, mail order and internet sales totaled $35 Billion in the US -- the estimate for 2017 is $534 Billion.
    If the law is overturned, all internet purchases will be taxed like local brick-and-mortar businesses..................it is going to level the playing field...............this is a good thing for local mom & pop stores.


    Below is a summary from Bloomberg:

    The U.S. Supreme Court will consider freeing state and local governments to collect billions of dollars in sales taxes from online retailers, agreeing to
    revisit a 26-year-old ruling that has made much of the internet a tax-free zone.
    Heeding calls from traditional retailers and dozens of states, the justices said they’ll hear South Dakota’s contention that the 1992 ruling is obsolete in
    the e-commerce era and should be overturned.
    State and local governments could have collected up to $13 billion more in 2017 if they’d been allowed to require sales tax payments from online
    merchants and other remote sellers, according to a report from the Government Accountability Office, Congress’s non-partisan audit and research
    agency. Other estimates are even higher. All but five states impose sales taxes.
    Online retailers Wayfair Inc., Overstock.com Inc. and Newegg Inc. are opposing South Dakota in the court fight. Each collects sales taxes from
    customers in only some states.
    The case will also affect Amazon.com Inc., though the biggest online retailer isn’t directly involved. When selling its own inventory, Amazon charges
    sales tax in every state that imposes one, but about half of its sales involve goods owned by third-party merchants. For those items, the company says
    it’s up to the sellers to collect any taxes, and many don’t.
    The court probably will hear arguments in April with a ruling by the end of its nine-month term in late June.

    ‘Physical Presence’
    The high court’s 1992 Quill v. North Dakota ruling, which involved a mail-order company, said retailers can be forced to collect taxes only in states
    where the company has a “physical presence.” The court invoked the so-called dormant commerce clause, a judge-created legal doctrine that bars
    states from interfering with interstate commerce unless authorized by Congress.
    South Dakota passed its law in 2016 with an eye toward overturning the Quill decision. It requires retailers with more than $100,000 in annual sales in
    the state to pay a 4.5 percent tax on purchases. Soon after enacting the law, the state filed suit and asked the courts to declare the measure
    constitutional.

    “States’ inability to effectively collect sales tax from internet sellers imposes crushing harm on state treasuries and brick-and-mortar retailers alike,”
    South Dakota said in its Supreme Court appeal.
    Wayfair, Overstock and Newegg said the court should reject the appeal and leave it to Congress to set the rules for online taxes.
    Expressing Doubts
    “If Quill is overruled, the burdens will fall primarily on small and medium-size companies whose access to a national market will be stifled,” the
    companies argued. “Congress can address this issue in a balanced and comprehensive manner through legislation.”
    Three current justices -- Clarence Thomas, Neil Gorsuch and Anthony Kennedy -- have expressed doubts about the Quill ruling. Kennedy said in 2015
    that Quill had produced a “startling revenue shortfall” in many states, as well as “unfairness” to local retailers and their customers.
    “A case questionable even when decided, Quill now harms states to a degree far greater than could have been anticipated earlier,” Kennedy wrote. “It
    should be left in place only if a powerful showing can be made that its rationale is still correct.”
    Gorsuch, the newest Supreme Court justice, suggested skepticism about Quill as an appeals court judge. And Thomas has said he would jettison the
    entire dormant commerce clause, saying “it has no basis in the Constitution and has proved unworkable in practice.”
    Amazon backs a nationwide approach that would relieve retailers from dealing with a patchwork of state laws. Amazon once relied on the Quill ruling
    and didn’t collect sales tax at all; the company gradually changed its position as it built warehouses all over the country, giving it a greater physical
    presence in multiple states.
    The case is South Dakota v. Wayfair, 17-494.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  2. #2

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    Default Re: Planning a Big Purchase ?

    Another reason why I am grateful to be living in NH.... No sales tax,
    Ludwig Classic Maple 22x16,10x8,12x9,16x16
    7" Moon Gel Practice Pad
    Sabian HHX Legacy

    Decide whether this is love for the craft or simply an ego thing

    http://www.redskymary.com/ NOT MY BAND, JUST A GREAT LOCAL BAND WHO SHOULD BE SOOO MUCH BIGGER IMO

  3. #3

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    Default Re: Planning a Big Purchase ?

    I love to visit NH...............but I'm glad not to pay their property taxes...............they'll get you somehow.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  4. #4

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    Default Re: Planning a Big Purchase ?

    True but still less than any surrounding states combined Income, Property, and Sales Tax.
    Ludwig Classic Maple 22x16,10x8,12x9,16x16
    7" Moon Gel Practice Pad
    Sabian HHX Legacy

    Decide whether this is love for the craft or simply an ego thing

    http://www.redskymary.com/ NOT MY BAND, JUST A GREAT LOCAL BAND WHO SHOULD BE SOOO MUCH BIGGER IMO

  5. #5

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    Default Re: Planning a Big Purchase ?

    The five states with the highest average combined state and local sales tax rates are Louisiana (9.98 percent), Tennessee (9.46 percent), Arkansas (9.30 percent), Alabama (9.01 percent), and Washington (8.92 percent). Jan 31, 2017.

    The next four top cities are in California: Long Beach, Los Angeles, Oakland and Fremont. The state sales tax levied in California is a flat 7.25 percent; but with various permutations of county and city taxes, all four cities have a total of 9.75 percent sales tax.

    Of America's most populous cities, the following impose the highest combined state and local sales tax rates:

    Seattle, WA – 9.6%
    Oakland, CA – 9.5%
    Chicago, IL – 9.25% (10.25% as of Jan. 1, 2016)
    Memphis, TN – 9.25%
    Nashville, TN – 9.25%
    Los Angeles, CA – 9.0%
    Long Beach, CA – 9.0%
    New Orleans, LA – 9.0%

  6. #6

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    Default Re: Planning a Big Purchase ?

    Quote Originally Posted by late8 View Post
    The five states with the highest average combined state and local sales tax rates are Louisiana (9.98 percent), Tennessee (9.46 percent), Arkansas (9.30 percent), Alabama (9.01 percent), and Washington (8.92 percent). Jan 31, 2017.
    Washington and Tennessee have no state income tax.
    Alabama and Arkansas are the two lowest property tax states in the USA.
    If it were not for Dixieland Jazz and the great Cajun food, Louisiana would go broke.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  7. #7

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    Default Re: Planning a Big Purchase ?

    Quote Originally Posted by Ricardo View Post
    Washington and Tennessee have no state income tax.
    Alabama and Arkansas are the two lowest property tax states in the USA.
    If it were not for Dixieland Jazz and the great Cajun food, Louisiana would go broke.
    The five states with the highest average combined state and local sales tax rates are Louisiana (9.98 percent), Tennessee (9.46 percent), Arkansas (9.30 percent), Alabama (9.01 percent), and Washington (8.92 percent). Jan 31, 2017.

    State SALES TAX is what we're talking about here right??

  8. #8

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    Default Re: Planning a Big Purchase ?

    The state sales tax rate in North Carolina is 4.750%. With local taxes, the total sales tax rate is between 6.750% and 7.500%. North Carolina has recent rate changes (Sat Apr 01 2017).

    I'll admit that I don't follow these things like I should, but, I do know that had I bought a house in NJ, I would be paying a lot more in my property taxes which is $ 850 a year (as a disabled vet in the eyes of Uncle Sam, I do get a break in those taxes, but even without that break, my taxes would only be somewhere between $1100 and $1200 a year).

    It just cost me $400 to renew my registration for my GT. $370 of that is for property tax on my car.

  9. #9

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    Default Re: Planning a Big Purchase ?

    Quote Originally Posted by late8 View Post
    State SALES TAX is what we're talking about here right??
    Yessir, we are.
    I was trying to provide reasoning as to (perhaps) WHY some of those states have higher sales tax rates.

    Quote Originally Posted by rickthedrummer View Post
    The state sales tax rate in North Carolina is 4.750%. With local taxes, the total sales tax rate is between 6.750% and 7.500%. North Carolina has recent rate changes (Sat Apr 01 2017).

    I'll admit that I don't follow these things like I should, but, I do know that had I bought a house in NJ, I would be paying a lot more in my property taxes which is $ 850 a year (as a disabled vet in the eyes of Uncle Sam, I do get a break in those taxes, but even without that break, my taxes would only be somewhere between $1100 and $1200 a year).
    It just cost me $400 to renew my registration for my GT. $370 of that is for property tax on my car.
    I feel your pain.................NC is not a horrible property tax state................and it is good to know you get the DV break.
    Property taxes in New Jersey are insane................highest in the USA, I believe.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  10. #10

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    Default Re: Planning a Big Purchase ?

    "Property taxes in New Jersey are insane................highest in the USA, I believe."

    That's why I never bought a house in NJ.

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