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Old 01-08-2014, 12:34 PM   #21
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Hop-it indeed is an issue. Our client is working with jurisdictions to streamline reporting and have it all done electronically. Most larger jurisdictions now are "report and pay" online, but many smaller ones are not. There is a huge retail lobby out there that argues, rightfully so in my mind, that the avoidance of sales tax collection by online retailers gives them an unfair advantage. The cost to states, in lousy economic times, is in the billions. The sticking point has always been the "physical presence" test. State courts have been increasingly willing to stretch what constitutes a "physical presence" in the state. Just in the last 2 months, Amazon lost a case in NY. The NY court found that if Amazon had any relationship at all with a NY-based website, and paid the website for traffic redirected to an Amazon site, i.e. the Amazon agents program, that was a sufficient nexus to require Amazon to collect NY State sales tax.

Plus, states are putting a lot more emphasis on the Use tax for businesses. I have two clients who just underwent WA sales tax audits and the auditors spent most of their time looking the companies' out-of-state purchases to see if use tax was due, rather than looking at their revenues and their sales tax collections.
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Old 01-08-2014, 12:47 PM   #22
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Hop-I hope this is not breaking any TOS-if your online sales are growing, you might want to check out www.avalara.com. They do have sales tax solutions for small/medium sized businesses and they are integrated into a lot of existing ecommerce software.

Disclosure-they are a client, but only trying to be helpful!
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Old 01-08-2014, 04:03 PM   #23
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Don

Thanks for raising the Florida issue it is a good example. The heading of Section 212.05 refers to Sales etc. However the heading is not a section of the statute. The statute itself refers to a tax on the retail occupation:

212.05 Sales, storage, use tax.—It is hereby declared to be the legislative intent that every person is exercising a taxable privilege who engages in the business of selling tangible personal property at retail in this state, including the business of making mail order sales, or who rents or furnishes any of the things or services taxable under this chapter, or who stores for use or consumption in this state any item or article of tangible personal property as defined herein and who leases or rents such property within the state.
(1) For the exercise of such privilege, a tax is levied on each taxable transaction or incident, which tax is due and payable as follows:
(a)1.a. At the rate of 6 percent of the sales price of each item or article of tangible personal property when sold at retail in this state, computed on each taxable sale for the purpose of remitting the amount of tax due the state, and including each and every retail sale.

The point of drafting the statue so as to tax the retail occupation is to avoid a state taxing interstate commerce which in the 20th century was defined as almost everything.
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Old 01-08-2014, 04:11 PM   #24
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Ok, speaking of tax, let's say I buy a boat in a state that has no or little sales tax-- like SC, where it is capped at $300. Can I document this vessel with the Coast Guard and avoid titling (and subsequent sales tax) it in my home state?
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Old 01-08-2014, 05:06 PM   #25
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Ok, speaking of tax, let's say I buy a boat in a state that has no or little sales tax-- like SC, where it is capped at $300. Can I document this vessel with the Coast Guard and avoid titling (and subsequent sales tax) it in my home state?
Depends on your home state laws, how they are worded and how far are you willing to interpret them in your favor...if you lived in NJ the answer would be no...you would pay the diff of $300 and a total of 7% of the purchase. price....assuming you paid the $300 to SC.
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Old 01-08-2014, 06:06 PM   #26
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Cardude-yours is the question that comes up regularly as I referred to in an earlier post. Sales/Use tax depends on physical location, for a boat as well as for a store. You can buy your boat anywhere. When you move it into your home jurisdiction, the boat is subject to the sales/use tax laws there. Whether the boat is documented or not generally makes no difference, where the boat is home-ported for documentation makes no difference. What matters is where you keep the boat and for how long (states have different periods to subject the boat to state jurisdiction).

An example of the trouble that can arise-here is Seattle (8.5% sales/use tax with no upper limit), a 400 foot yacht came in from Victoria, valued at close to $125M. They docked for a few weeks and were going to do some work on the boat. The time period in WA is 60 days. If the boat is in the state for 60 days, it must be registered and sales/use tax paid on the value of the boat. You can get a permit for an additional 60 days. The Captain or owner did not get a permit-the state tax folks showed up with a bill for 8.5% of $125M! That is a $10M tax bill! They ended up getting a waiver for the repair time and quickly left the state!
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Old 01-08-2014, 06:20 PM   #27
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Who will find me and turn me in in my home state?


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Cardude-yours is the
question that comes up regularly as I referred to in an earlier post. Sales/Use tax depends on physical location, for a boat as well as for a store. You can buy your boat anywhere. When you move it into your home jurisdiction, the boat is subject to the sales/use tax laws there. Whether the boat is documented or not generally makes no difference, where the boat is home-ported for documentation makes no difference. What matters is where you keep the boat and for how long (states have different periods to subject the boat to state jurisdiction). An example of the trouble that can arise-here is Seattle (8.5% sales/use tax with no upper limit), a 400 foot yacht came in from Victoria, valued at close to $125M. They docked for a few weeks and were going to do some work on the boat. The time period in WA is 60 days. If the boat is in the state for 60 days, it must be registered and sales/use tax paid on the value of the boat. You can get a permit for an additional 60 days. The Captain or owner did not get a permit-the state tax folks showed up with a bill for 8.5% of $125M! That is a $10M tax bill! They ended up getting a waiver for the repair time and quickly left the state!
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Old 01-08-2014, 06:29 PM   #28
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Who will find me and turn me in in my home state?
Does Texas require state registration on a federally documented vessel? As far as I know (I have paid the SC sales tax on two boats) SC does not notify your home state. If you bought the boat in FL with a 90 day cruise permit, FL notifies your home state.

In Tennessee the TWRC visits the marinas, and walk the docks once per year. They will give an unregistered boat a citation. If Texas does not have boat title or registration laws you possibly could get a pass.
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Old 01-08-2014, 07:01 PM   #29
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Cardude-Texas requires all boats to be registered. If you are in Texas waters, or in a Texas marina without a registration sticker, you will get hit. To get the registration, you have to show proof that the sales/use tax was paid.
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Old 01-08-2014, 07:11 PM   #30
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Is the labor portion of the refit subject to sales/use tax?

Maybe services are not taxed in LA.
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Old 01-08-2014, 07:22 PM   #31
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I was under the impression that if the vessel was CG documented then the state registration was not needed, but I think I was confusing titling with registration...

Click image for larger version

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So a documented boat doesn't have the state numbering on it but still needs the state sticker?

Can't I just tell the CG that I'm just "passing through"? I seem to have problems following rules...
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Old 01-08-2014, 07:25 PM   #32
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...

So a documented boat doesn't have the state numbering on it but still needs the state sticker?
In California, documented boats don't need to be state registered/stickered, but many other states do.
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Old 01-08-2014, 07:49 PM   #33
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I was under the impression that if the vessel was CG documented then the state registration was not needed, but I think I was confusing titling with registration...

Attachment 26542

So a documented boat doesn't have the state numbering on it but still needs the state sticker?

Can't I just tell the CG that I'm just "passing through"? I seem to have problems following rules...
If you have current documentation, I don't think the USCG cares about your state registration. The state does. FL requires documented boats to have a sticker with current decal on the port side window.

Federally documented vessels in the state of SC do not "register", but just pay the state sales tax up to $300.00.
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Old 01-08-2014, 08:13 PM   #34
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Washington State exempts purchases made by residents of Alaska from sales tax as long as the item is leaving Washington. There is a form that must be filled out at the time of purchase and the retailer has to keep a log of exemptions. Use tax would apply in Alaska in areas where there is a sales tax, but since Anchorage has no sales tax, it amounts to a pretty big deal for us when purchasing items at the Seattle Boat Show.

I have to assume there may other cases where sales tax exemptions occur so I would certainly research that.

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Old 01-09-2014, 12:41 AM   #35
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Who`d have thought an Aussie would ever prefer an aspect of our tax system? Our sales type tax, called GST (Goods and Services Tax) is a Federal tax, 10%, not varying between states, no state/state conflicts.
At present there is NO GST on overseas purchases < 1K, an added reason to buy o/s.
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Old 01-09-2014, 09:11 AM   #36
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Ok, speaking of tax, let's say I buy a boat in a state that has no or little sales tax-- like SC, where it is capped at $300. Can I document this vessel with the Coast Guard and avoid titling (and subsequent sales tax) it in my home state?
Documenting a boat does not relieve you from paying sales tax. In some states it relieves you of the cost of state registration, but that's just a few dollars per year.

Typically, the $300 you paid in taxes to SC is credited towards the sales tax you owe in your home state or the state where you use the boat the most.
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Old 01-09-2014, 09:18 AM   #37
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........
Federally documented vessels in the state of SC do not "register", but just pay the state sales tax up to $300.00.
And personal property tax of 10.5% of the boat's value every year!

It's 6% if it qualifies as a second home and you have no other second home.
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Old 01-09-2014, 09:20 AM   #38
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Who will find me and turn me in in my home state?
Amazon now sends me a listing of everything I've bought from them in the past year and the amount of tax I am supposed to report and pay.

How long will it be before the government gets this list also?
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Old 01-09-2014, 09:46 AM   #39
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Another thing to be careful with is there are several states that will determine that you are using your boat in their state, typically after 90 consecutive days, but in some cases 30 days. Then they assess a use tax based on the boat's then current value. In almost all cases they will give you credit for any sales tax you have paid elsewhere. The trap comes in if you are from a low tax / or no tax state or your boat has gone up in value since when you purchased it. My Krogen 42 is now worth 250% of its initial sales price and thus if I had paid sales tax I would have to pay on the increase in value.

Generally these states exempt time spent in a repair yard or storage on land for the off season.

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Old 01-10-2014, 08:10 PM   #40
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You pay sales tax to the state you were standing at the time of purchase. If I'm in Phoenix, AZ and purchase a tire for my California-registered, the Phoenix retailer collects the tax on behalf of the State of Arizona. If I ordered the tire remotely for shipping to California, I'd have to pay California use tax instead of Arizona sales tax. ... Your boatyard should be collecting the sales tax, because you took delivery (installed on your boat) at the boatyard. Yes, sales/use tax is due on both new and used items purchased unless you operate a business and will be reselling it and collect sales tax from the purchaser.

Contact the State of Louisiana to confirm. The state's website likely answers your question.

Frequently Asked Questions : Louisiana Department of Revenue
and no sales tax on labor.
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