State of California reaching for Sales Tax

 

@carlsbad2  Your welcome.  Yes, the process is difficult.  All regulations are difficult, not just customs.  State regulations more so because their codification scheme is less user friendly and at times simply unintuitive. In my experience entry was blocked at port weeks to almost two months simply because the logistics firm did not complete paperwork properly or put incorrect codes on the bill of lading.  I read the code and guidance similarly- you are in the clear from both a fed and state perspective.  The burden of proof includes the original invoice or shipping documents proving duty paid on original entry, the original shipping paperwork on first entry  (bill of lading), the return shipping paperwork from you to Grimm, the Grimm invoice showing warranty repair no charge, the shipping paperwork (bill of lading) you received when shipped back, and an attestation of no value added.  I have listed the complete package.  You may not need all of the documents    The most critical are original sales invoice, the recent invoice showing warranty repair no charge, and an attestation of no value added.  I believe you, as the personal owner and re-importer can self certify no value added but the guidance implies it is best from the foreign repair company (Grimm).  Be aware of a push back by officials if you self certify using only the Grimm invoice as proof.  To error on stating the obvious, sincerity is the key to success in any conversations with federal or state officials   

Yes, Grimm is excellent from both an audiophile and customer service/business perspective.  Good luck again. 

John

 

@carlsbad2 

Good luck ... always appreciate your posts!!

I’m guessing there’s some form that allows you to explain your circumstances.  Kinda like having to deal with selling things on PayPal. A couple of years ago I received a 1099. Long story short, after explaining to the IRS, that I was just getting rid of something at a loss, the 1099 went away.

Best of luck Jerry.

+1 @chenry is correct... 

You will need to show the item you sent and that was returned was not a purchase but was an item sent and returned for manufacturer's service. Grimm should have an invoice pro forma you can use. If you have your original purchase receipt showing the article with its purchase in state and the invoice, that should suffice.

International returned goods not NOT pay import taxes twice.  Be careful to document that the item that you imported was REPAIRED and was NOT a new-stock item!  Custom's agents are not service techs.  New and used box/item often look the same...   

If you get really stuck, and it is worth the time, you can visit your local Customs Office (get one with a service window) and request to speak with a Supervisor.  (Hint - Supervisors often provide better service than the inspection officers - they deal with these issues more often.)  Take your documentation, photographs, gear, etc.  Be clear and simply state you are NOT an Importer, you are customer/end-user and that you sipped the item back for repair, and that CA has made a mistake - so you need this issue resolved so you can contact CA.  You may get passed around a bit due to everyone's duty-schedules, so take a book to read...

Once the returned-goods importation status is clarified - if CA does not quickly correct the error, you can call the constituent services office for your US Congress person - yes, they really do help...  They are on your side and will give you additional instruction...

It is easier than it may seem and should be very empowering.  You may need this knowledge again...

 

-1 @audioman58  

"Ca is the highest taxed state in the country..."  This is a merchandise issue. You rhetoric is NOT true, but typical hyper-political misinformation/disinformation - and you know it!

The facts...

Overall, in 2025 CA has the 5th highest Income Tax rate (13.5%)"  <Highest Taxed States 2025>. 

 

Interestingly, Sales Tax is highest in the South - where I live.

"The five states with the highest average combined state and local sales tax rates are Louisiana (10.12 percent), Tennessee (9.56 percent), Arkansas (9.46 percent), Washington (9.43 percent), and Alabama (9.43 percent). <2025 Sales Tax Rates by State | 2025 State and Local Sales Taxes>

 

Real Estate Tax: The states with the lowest property taxes are: 

1. Hawaii -Average Effective Property Tax Rate: 0.29%

2. Alabama -Average Effective Property Tax Rate: 0.43%

3. Colorado - Average Effective Property Tax Rate: 0.52%

4. Nevada -Average Effective Property Tax Rate: 0.55%

5. Utah - Average Effective Property Tax Rate: 0.57%

<Property Taxes By State 2024: Ranked Lowest to Highest>

 

Tax are a bit of shell-game (including sales, income, and real estate taxes).  

Pick you taxes, residents end-up spending about the same in most states.  Stop with the politically motivated mud-slinging. Facts matter, BS doesn't...

To offer another opinion, I've lived in California for over 50 years and wouldn't live in any other state. 

In 2019 I bought a corvette zr1 in California paid there 15k tax it was the only place in the country that had one left.the dealer and gm had huge rebates that covered that cost but I drove that car for a year with out registration because the dmv in my state was waiting for all the paperwork from California tax people.it took California more than a year for california to send my state thier portion of the taxes. I just kept the sales bill in the glov box proving my blood money was paid. It's a beautiful state my aunt live in Westwood near lA spent many high-school summers there and on the beach in the 70's.maybe I can go ride that multi billion light rail some day.enjoy the music and the journey.by the way going over donnor pass in the corvette was priceless.

@audioman58 I can't diagree with you.  Been here 44 years and watched it get worse and worse.  there were some good years.  I did consider leaving when I was younger but remember developing a roll of file with photos of beach, golf and snow skiing all on the same roll.  Hard to beat that for location.  Now I've been with the same company 44 years, have a great retirement coming, and have my kids in the area and they will visit the home they grew up in so long as I live here.

Jerry

Ca is the highest taxed state in the country, why do you think so many people and businesses have moved , until  they get their act together they are ruining 

what once was a beautiful state.

@jsalerno277 Thanks for the link. Fortunately the work was warranty, no charge even though the unit is a few years old. Grimm stands behind it’s stuff.

I think I’m in the clear if I can just find a way to get them the information. The website they sent me to is all about accepting tax payments and no way to submit documentation why you don’t owe.

The value put on the form was $5000 (less than actual value) and they want just under $400.  I thnk the path to exemption is purposely difficult and they are hoping that I'll just give up and pay it.

Jerry

No way to avoid the California state enfranchise tax board. Even if you are the second purchaser of the item and it was already paid tax on the first time, you still have to pay taxes on it again. If you buy something on eBay you have to pay taxes on it in California. 

Buying stuff on second hand forums such as audio gone or USA. Audio Mart fly under the radar unless it's with a dealer.

You're lucky to escape paying taxes on state to state purchases, which sometimes can happen with states that have no taxes, but just be knowing you could get a surprise tax bill at any time. 

This is just not California thing. This is every state with a sales tax issue. We need more money for homelessness + for the never-ending bullet trade construction.....lol

States pay for/receive data on imports from common carriers and customs so that they can levy sales and "use" taxes.

You will need to show the item you sent and that was returned was not a purchase but was an item sent and returned for manufacturer's service. Grimm should have an invoice pro forma you can use.If you have your original purchase receipt showing the article with its purchase in state and the invoice, that should suffice.

I believe the proper reference for articles previously imported, with respect to which the duty was paid upon such previous importation, exported for repair or modification, and reimported is guide 9801.00.26.00. Here is the link:  https://hts.usitc.gov/search?query=9801.00.26.00

It is complex with time limits prescribed.  The key in determine application of tariffs is whether there was value added modifications.  The schedule chart (middle of the chart) indicates reimport is duty free if there was no value added modifications.  If Grimm did not charge for the repair, there is no value added.  You need to get Grimm to send you an attestation in the prescribed format and they need to state no value added even though it was updated as well as repaired.  
 

California law is more difficult to navigate.  Maybe this applies: https://www.cdtfa.ca.gov/formspubs/pub108/nontaxable-charges.htm  
I am not a California resident, account or lawyer.  It appears repair parts greater than 10% of the total repair bill are subject to state tax and labor cost not taxable. Seems like the key is that Grimm repaired at no cost with no value added modifications.  The  customs attestation may  be able to be used with the state as well.   

Good luck   

 

@carlsbad2

I went through this same thing a couple of years ago when I shipped an Aqua La Scala back to Italy for some updates. It was flagged coming through customs in New Jersey and a CA duty form arrived in the mail shortly afterwards.

I called the state franchise tax number provided and had them walk me through the cryptic online process. As long as you have the shipping waybill and state that it was already purchased/tax paid you’re good to go but no less than a PITA to bother with for sure.

@gordon Technically, any item a CA resident buys out of state and did not pay sales tax in that state then has to pay the sales tax in California. It is a question on the annual CA Tax Return Form.

I had to do the same thing when I lived in Colorado and purchased something in California and did not pay CA sales tax several years ago. The Colorado one was spotted during a random tax audit.

 

@gordon I've had the same problem in California. Bought a pricey painting from a dealer in Italy. Had it shipped to California, and voilà, I owe sales tax.

@gordon in CA that would be a "gotcha".  No way out of that one.  In my case, I shipped it out and they just saw it coming back.

Jerry

Good luck in convincing the state that they are owed no additional funds…..

A different situation…I bought a pair of new speakers from a Colorado dealer.  The speakers were drop shipped to me from the British manufacturer.  A month later I got a letter from the state of Idaho (where I live) telling me I had to pay state sales tax on the speakers.  The dealer told me not to pay it.  Easy for him to say.  As I was in the middle of refinancing my mortgage, and didn’t want any complications, I paid it.

@facten  Thanks.  Your suggestion helped me figure out how to find tracking.  I didn't use my normal service because it doesn't support international.  I logged into USPS and there it is.

Now I tried to create a login with the state of california and it gives me only 2 choices:

1.  I am the owner of a business.

2.  I am the representative of the owner of a business

Neither of which are factual and if I log in as one or the other, they may use that to find that indeed I am an importer.  No choice for "I am a customer".  I remember this was a problem when shipping it out.

They have a customer service number, M-F 8-5.  I'd almost rather have a root canal than sit there punching buttons for half an hour to try to get to a human.  I'll try next week.

Jerry

I thought you didn't want/like to talk politics, even as an aside.

@nonoise , when he does it it does not count as politics.  

@facten I printed it myself with USPS.

Any reason that you can't get a copy of the original shipping document from whatever company you used for sending over, and documentation from Grimm as to the nature of the service? Doesn't seem that complicated to get the documentation,  end result is a different matter 

It is very consistent with California looking for every method they can to grab money.  They burn through a lot of it.  I could name a lot of other examples but won't.  

I thought you didn't want/like to talk politics, even as an aside.

When I sent an integrated back to Canada for a replacement (since they sent the wrong model) they told me to make sure I declared it as going back for repairs and that they'd send it back the same way to avoid any hassles with customs. They even gave me the code and wording for it. That was over 15 years ago. It's always been a hassle and that work around has long been known as the way to do it. Maybe Grimm could have worked with you on it if they knew your situation?

Now that we have a 'hair on fire' situation with customs, any item that expensive is going to trigger suspicion so they are going to forward anything they have on it to the appropriate state that the receiver resides in. It's not just happening in California. I could name a lot of other examples but I won't.

All the best,
Nonoise

I feel you man.  The tax on that piece is gonna be heavy, at approximately 10%.

Here's more info on that:  CSMS# 17-000046 - Requirements for Subheading 9801.00.10 – U.S. and Foreign Goods Returned

 

@shtinkydog It is very consistent with California looking for evey method they can to grab money.  They burn through a lot of it.  I could name a lot of other examples but won't.  

Original receipt may help but they may want to see how it got out of the country to be returned. still have't found that. 

Jerry

@carlsbad2 That really is bizarre that CA is assessing a sales tax on your piece.  I've never heard of that happening until now.  If you have the original receipt for the item, I would assume that would be sufficient proof that it's actually "american goods returned" under classification 9801.00.10 of the HTSUSA.   

@tablejockey an others.   This is 2024 but had nothing to do with Biden. This is the sate of CA and it is sales tax.

Please at least read the post before you start posting your political BS.