FWIW I have been sick for 2 weeks with a cold and haven't felt like dealing with it. However, I did talk to the auditor who indicates that the use tax can apply to whatever they want it to apply. I have sent a receipt for the amp which I purchased which is what I expect to be taxed for $2600 vs $6700. which will lower the bill. If lucky, she will drop it. But ...who knows. I'll keep you posted.
Received a Bill for State Tax on An Amp Bought in Canada Last Year
Wow! The envelope said “Dept of Revenue” so I figured it may be my car tags due. I opened the envelope to find a statement that I owed $665 for “use tax” on an amp I bought last year in June. Shocked is an understatement. Yes, I bought a used amp from a guy in Canada through A’gon. But I paid the tariff on it. Now they also want tax. However, the amount they are basing it on is over double what I paid for the amp. But had to send it to Don Sachs for repair a few months later. So I wonder if they are seeing that as a separate purchase rather than a repair. They even charged me $43 interest which is more ridiculous IMO.
So the question...Are you required to pay tax on a used amp or other used items? Has anyone else encountered this? Yes, I know the states are cracking down on the sales tax. But on used items? Wow
So the question...Are you required to pay tax on a used amp or other used items? Has anyone else encountered this? Yes, I know the states are cracking down on the sales tax. But on used items? Wow
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grannyring
But if you buy a used amp from Joe aphile and bring it back you owe no tax. Correct?Under Tennessee rules, it looks like he'd owe the Use Tax. I cannot fathom any other answer based on the realities involved with trying to collect such a tax and the fact that nobody pays nor keeps track of these used transactions.Obviously some entity is monitoring the transactions, because the OP already received a Use Tax bill from the state. |
Maryland also has a "use tax" that applies to any purchases made outside the state in jurisdictions that do not charge tax. So, if I take a short trip to Delaware, and buy a $10,000 from Overture AV, and bring it back to Maryland, technically I owe $600. If I do an internet order, and don't pay tax on the order, again, I technically need to pay Maryland 6% of the invoice total. I do not think they actively try to track such purchases, but I suspect that orders coming from out of the U.S. might be easier to track, as the U.S., I believe, tracks the shipments, and probably relays to info to states if they desire. |
grannyring ”The Sales Tax does not apply to casual and isolated sales by persons who are not, or who have been deemed by the Commissioner not to be engaged in the business of selling tangible personal property or furnishing any of the services subject to the Sales or Use Tax. The Sales Tax, likewise, does not apply to sales of tangible personal property or taxable services not normally sold by a dealer and which has been used by the dealer prior to the sale ...Kindly notice how carefully the regulation states: "The Sales Tax Does not apply ..." It does not state that the Use Tax does not apply. The OP’s notice from the state clearly wasn’t for sales tax, because under state rules that’s paid by the seller. In this instance, the bill is sent to the buyer - it's Use Tax by the state's definitions. I do agree with @djones51 that Tennessee’s rules are odd, but the state’s bill for Use Tax owed still looks valid based on everything presented here. |
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Wow! Been nursing a cold for the last 4-5 days. My wife has been by my side....doing the same. She gave it to me. Oh well. On our 3rd bottle of "elixer" (small bottles) Summer colds suck. Anywayt, I haven’t kept up with the thread nor taken care of the issue yet. I may consult a lawyer 1st just so I have better understanding before I xcall about this. I will keep you posted as I progress. Thanks for your posts. |
Why bother responding to such matters when it's only going to get deleted, again, when they don't like the answer? This is only an exercise in framing the discussion (deleting valid answers) here to make it look like no one has the answer when it's right in the first sentence of the referenced quote: ”The Sales Tax does not apply to casual and isolated sales by persons who are not, orwho have been deemed by the Commissioner not to be engaged in the business of selling tangible personal property or furnishing any of the services subject to the Sales or Use Tax.The Commissioner deemed otherwise. All the best, Nonoise |
This quote from the reference just sited, ”The Sales Tax does not apply to casual and isolated sales by persons who are not, or who have been deemed by the Commissioner not to be engaged in the business of selling tangible personal property or furnishing any of the services subject to the Sales or Use Tax. The Sales Tax, likewise, does not apply to sales of tangible personal property or taxable services not normally sold by a dealer and which has been used by the dealer prior to the sale; this exemption however, does not apply to any sales of tangible personal property or taxable services bought upon a resale certificate for resale by those persons who hold themselves out as engaged in business, notwithstanding the fact that the sales may be few and infrequent. The exemption also does not apply to the casual and isolated sale of aircraft , vessels and motor vehicles which are required to be registered by the State of Tennessee or the U.S. Government.” Unless this amp was purchased from a business selling new and used goods, the tax is not owed. If purchased from a fellow audiophile who does not run a retail business, then no tax is owed. |
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grannyring TN residents are certainly not paying sales tax on Facebook and Craigs List type of used good salesThey should be charged sales tax on FB and CL if the seller is a business with a sales tax certificate, unless it otherwise qualifies for the exemption as listed by the state. (Note that used items aren’t listed as exempt from sales or use tax.) If the seller for whatever reason does not charge tax, the state can assess a "use tax" on the transaction, as explained on the website and as the OP discovered. One thing to remember is that something is not rendered tax-free simply because tax is not charged. That’s the exact issue facing the "former guy" right now as well as the OP of this thread. |
I completely understand your sense of this. I understand it differently. Retail is not how you define it in my understanding. We will not agree on this. It may just may boil down to how far reaching our understanding of the law and “retail” applies case by case. TN residents are certainly not paying sales tax on Facebook and Craigs List type of used good sales. This particular case on the amp is curious. The state may think it was a new retail sale. Don’t know. |
grannyring Used sales from private parties is not a retail sale by definition ...You’re mistaken. Retail sales include any private sales of items not intended for resale. That’s why the OP got a tax bill. For more information, see the state tax website that I’ve already provided you several times. In Tennessee’s case, it has even instituted a "use tax" so it can collect from users when a seller engages in your sort of argument. Again, that is explained on the website. Remember: The OP already received a tax bill with interest. To contest it, he’ll have to do a little better than your protest. Believe me, these taxing entities have heard all of the excuses before right up to and including, "I’m a sovereign citizen and not subject to tax." |
grannyring Show me where it says used items are taxed. Only retail sales are mentioned.The term "retail sales" includes the sale of used items between private parties. I'm not sure why you think otherwise. In any event, the proof you seem to seek is in the OP, silly: ... I bought a used amp from a guy in Canada through A’gon. But I paid the tariff on it. Now they also want tax."So he has a tax bill from the taxing authority, under the terms explained on the state website. If you think used items are somehow oddly exempt under Tennessee tax code, I’m sure the OP will be grateful for the appeal you’ll file on his behalf. When filing an appeal in a tax code dispute, you'll need to cite the exact language in the code that supports your claim. Good luck with that! |
grannyring We just disagree. The tax was in errorNot really. There’s a difference between disagreeing and being disagreeable. I provided you a direct link to the Tennessee Department of Revenue sales tax rules. According to the Department of Revenue, used items are taxable in Tennessee. So you’re arguing with them, not "disagreeing" with me. |
grannyring Seems true unless you are a business. We common folk selling on Craigs List, yard sales, Facebook buy sell trade, AudioGon etc.., pay and change no tax.Apparently you haven't bothered to read the OP, because he was charged the tax. As I noted, used items in Tennessee are not exempt from sales tax and when the tax is not collected, a companion "use tax" can be assessed by the state. Here's what the OP asked: Are you required to pay tax on a used amp or other used items? Has anyone else encountered this?The answer is clearly, "yes." And that's why he received the tax bill. |
grannyring Show me where is says used goods sold by folks not running a retail business?Most states have exemptions for things such as yard sales, including Tennessee. But your claim was: .... Used stuff, less cars in some instances, not taxed in TN and many states ...... and that is simply false. You'll find no such exemption in Tennessee or in most (if not all) other states. |
Quote below from your link. Just retail sales. Show me where is says used goods sold by folks not running a retail business? “Generally, the sales tax applies to the retail sale of tangible personal property and certain services such as lodging services, telecommunications services and installation and repair of tangible personal property. “ |
grannyring Used stuff, less cars in some instances, not taxed in TN and many states.No, you're still mistaken. As I already noted, that’s not how in works in Tennessee. You won’t find an exemption for used items on its sales tax website. In addition to its sales tax, the state also has a companion "use tax" that applies "when the sales tax was not collected by the seller on otherwise taxable products brought or shipped into Tennessee. The use tax applies to all items otherwise subject to sales tax ..." |
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You may not like it, but many states have a sales tax and all states that have a state and local sales tax also have an accompanying compensating use tax. Generally the sales tax and compensating use tax also applies to the sale of used merchandise. If you are a seller located within a state, you are required to register as a sales tax vendor with the state's department of revenue and collect the tax from your customer on each sale of taxable merchandise and remit it to the state periodically. If you are located out of state, in the old days the states could not force you as a seller to register and collect the tax for them because the states could not enforce their law in another state. That's where the "compensating use" tax part of the tax comes into play. Customers were required by law to remit the tax to the state on their own. Of course most of the time people didn't even know the law, and even if they did, most did not remit the tax, and the states had no way to enforce the law. Then, catalog sales took off and later the internet joined in. Now states are able to get third party sellers like amazon to collect and remit tax for them and many states have formal relations with out of state mail order companies who often have brick and mortar corporate affiliate stores instate. I believe the Canadians and some of the states have reciprocal agreements with each other. So they report taxable sales to each other. So.... you received a bill. And you may have received a bill for tax on the sale, and then, when a repair was made, that too is subject to tax. People may disagree about the level of state and local budgets, and reasonable people can disagree. But taxation should be fair and equitable. If a local merchant in a brick and mortar store is required to collect sales tax on new and used merchandise and services, why shouldn't a mail order catalog or internet seller be required to do the same? Not doing so creates a perverse incentive for people to make purchase in other states to avoid tax. |
It's oast States with a sales tax require you to pay that sales tax on items purchased out of state By mail or whatever means. It's often called use tax. California they have A-line on the tax return which asks if you bought anything for which you didn't pay sales or use tax and if you lie it now becomes potentially a crime and a penalty. I always take the high road and keep track of any significant purchases I made and claim them as a use tax item at the end of the year. It records in case there is any kind of disagreement. |
If it crosses the state line then it has a connection to the state unless you're advocating for a more federal system without state borders. If you find the laws of the state you're in onerous then change them or move. How about you move to a red southern state without all those nasty "progressives" where you can be free from the nonsense of California, I know how about Tennessee? |
Did you not read my last post? Check out the note at the end. Getting back on topic ... Why should the State of California charge me for something I bought in another state and had no connection to California other than it crossed state lines via the USPS or UPS? Frank |
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