Jump to content

Use Tax


colledge
 Share

Recommended Posts

I thought I'd share this here, since it involves buying.

 

1 year ago my name finally came up and I finally received my long awaited Dipper Clare. A beautiful 33 button gem of marbled ebony. The sibling of this instrument

 

http://comhaltas.ie/music/detail/comhaltaslive_380_7_mairead_corridan_plays_the_lone_bush/

 

Its a beauty. To say it was worth the wait would be difficult. They should do before and after photos of how much hair you have when you order a Dipper and when you get it, but I had one chance for something of this magnitude.

 

Anyway I just received a notice from the Illinois Dept. of Revenue that they will be auditing this purchase to make sure I don't owe Use tax.

 

Has anyone gotten this from their state due to the expensive nature of concertinas? I think its exempt and only applies to retailers. They want me to send them all of these documents and do their job for them. Maybe I'll call but this is annoying.

Link to comment
Share on other sites

Considering that Dipper makes only direct sales in small quantities and doesn't have a web site, you might be able to apply this clause:

 

"Items purchased for use in Illinois from persons who make isolated or occasional sales and who are not engaged in the business of selling tangible personal property at retail are not subject to use tax."

 

Source: http://tax.illinois....AQs-Use-Tax.htm

Link to comment
Share on other sites

Thanks Moira, that looks good and correctly describes C&R Dipper.

 

Dave, its a tax imposed on you for buying something out of state to avoid sales tax, by proving to you that you bought it, could have bought it in state, and essentially charging you the sales tax anyway to protect in state retailers.

Link to comment
Share on other sites

That's an interesting approach Moira but Dipper is not the same as somebody doing a garage sale. Other than instrument repairs, his prime business is the manufacture and sale of concertinas which IMHO most likely falls under the category of tangible personal property. Based on my reading of the text, overseas sales get no special treatment: they are considered the same as something bought in the next state over.

 

Most states want everyone to voluntarily report and effectively pay sales taxes on all purchases brought into the state. This is the crux of the battles between states and Amazon. But once the state becomes formally aware of a purchase as it might easily with items coming through customs, the buyer becomes a deer in the headlights and states are currently too needy to let these kinds of revenue opportunities pass. And since, in addition to the tax, penalties can also be assessed for non-compliance, it just isn't worth it to try and fight it. Better to pay the tax and get out of the Revenue Dept's crosshairs.

 

Ross Schlabach

Link to comment
Share on other sites

It seems to me that the matter of parity still applies.There is no vendor or retailer in Illinois from whom the concertina can be acquired or through whom it can be procured.Purchase of the subject Dipper concertina can only be achieved through a direct purchase from the source.The purchase was not initiated – in this case – to avoid the payment of tax.It was purchased one of only two ways that is it available – via shipment or collection from the source who does not sell to resellers.Accordingly, the State is not suffering from a loss of tax revenue to which it is entitled.

 

Link to comment
Share on other sites

A couple of years after I received my Dipper, I received a notice from Massachusetts seeking payment of use tax, interest and penalties. Based on my quick research at the time, it looked like the use tax was valid although in many cases it is probably overlooked--such as purchases on the internet. I hadn't even thought of it. They based the notice on a review of import duty documents which listed the sales price. I paid the use tax and interest, and they waived the penalty. It is not as high, however, as VAT in Europe. I think Massachusetts was about 6.25%. Other states will be higher or lower. Let us know how you resolve it with Illinois. Alan

Edited by Alan Miller
Link to comment
Share on other sites

Purchase of the subject Dipper concertina can only be achieved through a direct purchase from the source.The purchase was not initiated – in this case – to avoid the payment of tax.... .Accordingly, the State is not suffering from a loss of tax revenue to which it is entitled.

 

Reads like a sound argument - go on, take them on and argue your case on that basis. I reckon a lot of public officials make things up as they go along and they need to be challenged when there's a reasonable case that they're applying a law unfairly. Just paying them to avoid hassle encourages them.. So challenge it and see what happens

Link to comment
Share on other sites

I reckon a lot of public officials make things up as they go along and they need to be challenged when there's a reasonable case that they're applying a law unfairly. Just paying them to avoid hassle encourages them.. So challenge it and see what happens

Absolutely. And make yourself lots of hard work for minimal return and it's not worth chasing you...

Link to comment
Share on other sites

The person at the IL dept of Revenue basically confirmed what Ross said. Because Dipper is in the business of making concertinas its a tangible item that I bought for use in Illinois, I owe the tax.

 

I'm gonna read the statute, but it seems they justify the tax on the grounds that you hurt the state and it's retailers by living here and going out of state to buy, but they don't have an exemption if you can't get the item in state. Why would these geniuses do a silly thing like that?

Link to comment
Share on other sites

it seems they justify the tax on the grounds that you hurt the state and it's retailers by living here and going out of state to buy, but they don't have an exemption if you can't get the item in state. Why would these geniuses do a silly thing like that?

 

Maybe justifying the tax in this manner is just to make it palatable to the public, even if that's not really what the law says in the first place - which is of course, dishonest. You'd have to read the fine print to be sure and then make up your mind.

 

In relation to sales tax in Europe, I've paid Value Added Tax on new items imported from the States etc. But I've sucessfully argued against it, where the goods were secondhand, as the sales tax had already been collected in the States. In this case, I paid the tax in order to receive the goods, and then appealed sending photos showing wear & tear etc. and suggesting they might like to call & inspect at their lesiure etc. I got a refund.

Link to comment
Share on other sites

Has anyone got any idea what the tax rate is bringing a new concertina into the EEC,Bob

For the UK, 20% plus about 5% duties applied to the sum of the purchase price, shipping and insurance.

Edited by SteveS
Link to comment
Share on other sites

I've sat and thought on this for a day, and I still come back to the question "How did Illinois (and now Massachussetts) know you had purchased the Dipper?"

 

That aside, every year Robin and I end up paying a similar tax here in Ohio for items we couldn't find here, including musical instruments. The state income tax form has a nice line on it so that we can declare it and make it easy to pay it. My advice is to pay the tax.

 

As to the arguement about only being able to buy the concertina from a local source, I am sure that the tax folks in Springfield will point out that you can buy a concertina at "Fred's Music Emporium" in Quincy, never mind that is chemitzer or a cheap Chinese import or some other such thing that is not what you wanted.

 

Alan

Link to comment
Share on other sites

In relation to sales tax in Europe, I've paid Value Added Tax on new items imported from the States etc. But I've sucessfully argued against it, where the goods were secondhand, as the sales tax had already been collected in the States. In this case, I paid the tax in order to receive the goods, and then appealed sending photos showing wear & tear etc. and suggesting they might like to call & inspect at their lesiure etc. I got a refund.

 

As a self-employed person, i have a perfectly routine way of dealing with this situation. I have to levy VAT on my services to customers and turn it in to the tax office, and in return I get the VAT that I pay to my suppliers refunded. (The burden of VAT gets handed down to the last in line - the poor end customer!)

 

As it happens, my line of business is language services, and this includes teaching English as a foreign language - and I believe that learning English songs really helps to get vocabulary, grammar and syntax embedded in the brain. So musical instruments and accessories (concertina handstraps, banjo strings, etc.) are part of my toolkit - like my PC and accessories - and I can reclaim the VAT on them. I can even put the purchase price on the "loss" side of my profit-and-loss calculation!B)

 

I know I'm very lucky - this is the next best thing to actually earning a living with my passion for music!:)

 

Cheers,

John

Link to comment
Share on other sites

I've sat and thought on this for a day, and I still come back to the question "How did Illinois (and now Massachussetts) know you had purchased the Dipper?"

 

 

Obviously, US Customs is giving them the information, but what does the customs form actually say?

 

For the record I firmly support paying any and all taxes that are due, but let's just suppose that the form said "Concertina, value $XXXX". How do they know that the concertina is a new purchase and not a family heirloom sent back to the Mother Country for repairs and restoration? I would imagine that a concertina restored by Mr. Dipper would look brand new when he was done with the restoration, so how can they tell? I believe those restoration services would be exempt from this tax, right?

 

If this catches on with other States, it could become a real issue. Maybe in 5 years people like Barleycorn will be quoting prices broken out into parts and labor-- Instead of quoting a price of $3000, it might be: Concertina $300, restoration of said concertina $2700.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...