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View Full Version : Has anyone else got a call from Minimax asking for money? (Morphed into an OT thread)



Mark Rios
03-28-2008, 6:43 PM
I got a call from a lady from Minimax this morning. She said that due to a policy change somehow relating to a new management they were calling past customers (only in CA?) and telling them that Minimax was going to send them out a bill for the sales tax on their equipment purchases.

How is it legal for them to, almost a year and a half later in my case, decide to charge us more? When I was given the final price I believed it to include all extra charges. What was charged on my card was the bill. Now they want to come back and charge me for something that they decided to on a whim?

Has anyone else gotten this call or notification? What's the flimflamdingdang deal here? Are they going to call up Steve Clardy and ask for money from him on the MM16 that they gave him when his roof collapsed? Sheeeeesh!

Joe Jensen
03-28-2008, 6:46 PM
When I had a sales tax permit (not in CA), it was the businesses responsibilty to pay tax based on sales out. We did not have to collect it from customers. I would assume that Minimax is responsible for paying, but you are not responsible to pay them.

Brian Effinger
03-28-2008, 6:47 PM
I'd tell them you already clamed the sales tax on your state income tax returns. I don't know how California handles this, but here in New York, the tax forms asks you to input any out of state purchases.

Brian Kent
03-28-2008, 6:51 PM
I'll bet you that wasn't the company calling, but someone who got their sales list. I recommend you call the company from a phone number that you are sure is them and let them know what is happening.:eek:

Ben Davis
03-28-2008, 6:52 PM
I'll bet you that wasn't the company calling, but someone who got their sales list. I recommend you call the company from a phone number that you are sure is them and let them know what is happening.:eek:
Bingo. This stinks of a scam!

Bill Wyko
03-28-2008, 7:00 PM
I'd tell them the price you paid is the final sale and they need to deduct the sales tax from what you already paid. Get her number and report them to the BBB or the IRS.

Doug Shepard
03-28-2008, 7:10 PM
I'll bet you that wasn't the company calling, but someone who got their sales list. I recommend you call the company from a phone number that you are sure is them and let them know what is happening.:eek:

I dunno:confused: Seems like a scammer would be trying to get stooopid folks to cough up a charge card number to make that "tax" payment. If they're sending a bill out, it sounds like it might be legit (though still "Not My Problem") as it would be on Minimax invoices and return address info on the envelopes.

Chuck Wintle
03-28-2008, 7:13 PM
Bingo. This stinks of a scam!

I agree! It sounds like a scam.

Anthony Whitesell
03-28-2008, 7:17 PM
I'll agree, it sounds like a scam. Businesses are responsible for paying any and all applicable taxes. They may use money from the sale price or state and collect as a separate line item on the bill. I highly doubt that any company can persue the collection of taxes...ESPECIALLY after the tax year has closed.

If there customer service is worth anything, a quick phone call should clear it all up.

Phil Thien
03-28-2008, 8:42 PM
You are ultimately (as the end user) responsible for sales and use taxes on everything in your possession. Unlikely you'll ever be audited, but just the same. You don't have to pay the tax to Minimax, but you do have to pay it to CA (to be legal).

I have no idea why they have decided they need to collect the taxes now, though. If it was a policy change, you'd think they'd collect them going forward. Perhaps they have an office in CA that they didn't understand required they collect CA sales taxes? Perhaps they are applying for a business license in CA and CA is shaking 'em down for sales taxes on previous sales before granting it? I can only guess.

Going forward, more and more companies are requiring payment of sales taxes for states they don't even have an office in. Many states were shaking down mid to larger outfits to collect these, but I think a recent U.S. Supreme Court ruling made it unlikely the states will get very far on these efforts.

James Hart
03-28-2008, 9:12 PM
If a company physically sells directly to a consumer in a state, then they must collect sales tax on all sales in that state.

I think it's Woodworkers Supply that you might notice collects tax in WY, NM and the other state where they have a store.

Maybe CA decided that something MM did in the past couple of years equated to a direct sale to a consumer (WW show?) and they're making them go back and pay on sales delivered to CA.

Just speculation.

I think the odds of this being a scam are close to zero. Getting a list of MM buyers would be very unlikely, and as someone earlier said, the mechanics of how they plan to try to collect the money isn't at all consistent with how scammers operate.

I'm in the data business and have to pay pretty close attention to what the bad guys are up to, this smells bad, but not from the perspective of it being a scam.

Jim

Jim Becker
03-28-2008, 9:29 PM
I'm not sure what this is, but if I had received a call like that, I would have asked to be transfered to someone I knew at the company to see if this truly is legit and "why"....

Jamie Buxton
03-28-2008, 10:13 PM
This story sounds familiar. Last year on FWW's Knots forum there was a thread about Martin or Altendorf attempting to retroactively collect tax. (They're both German company making industrial-sized woodworking machines.)

Ben Cadotte
03-28-2008, 10:23 PM
You paid the agreed upon price for the product. It is not your fault they failed to add tax if necessary to the order. The tax is now their responsibility. Only thing I can think of is they got audited and busted for not collecting state sales tax. Again its their tough luck they didn't bill it correctly.

And even if you get a letter I would still call the company and verify. And if it is legit, then have a discussion on how they can raise the price of the items 18 months after purchase.

Alan Tolchinsky
03-28-2008, 11:21 PM
I can't imagine Minimax doing that. This has to be a scam. If anybody follows up on this please let us know.

David DeCristoforo
03-28-2008, 11:31 PM
"I can't imagine Minimax doing that. This has to be a scam. If anybody follows up on this please let us know."

Completely. If it's not a scam, it's embarrassingly lacking in class and good judgement on the part of the vendor. It is incumbent on the seller to collect any taxes at the time of the sale. If the seller failed to do this it is on them. To come back on the buyer after the fact and demand additional money would be a shockingly bad business practice. I cannot believe that an established vendor like SCM/MiniMax would do such a thing. So I'm going with scam.....

YM

Ken Fitzgerald
03-28-2008, 11:34 PM
I don't think it's a scam. A lot of these companies....Mini-Max, Oneida...etc. are industrial companies that have introduced products for the hobbiest or smaller shops in an effort to gain a broader market. I suspect some states are starting to put pressure on them to collect sales taxes.

Matt Bickford
03-28-2008, 11:45 PM
Did their website state that tax was included in the purchase price? I'm guessing that the answer is 'no' because then they'd be collecting tax for interstate transactions that is beyond their responsibility. The website probably stated that anybody in state XX must pay sales tax.

I'm assuming this was originally processed as an interstate transaction, thus negating their responsibilty to collect CA sales tax. This doesn't negate the fact that it is owed to CA, however.

Just send them a copy of the receipt you got from CA after you sent them the tax owed. If your receipt from MM doesn't say you paid tax and you never sent the money to the state, I would think that you owe the tax. Receipts usually state tax as a seperate item.

David DeCristoforo
03-28-2008, 11:53 PM
"Did their website state that tax was included in the purchase price? I'm guessing that the answer is 'no' because then they'd be collecting tax for interstate transactions..."

As I understand it, it is the responsibility of the seller to collect taxes at the time of the sale. If it is a sale made from a state that has no sales tax but the buyer is in a state that does, it's is still the seller's responsibility to see to it that the taxes are collected and paid. Conversely if a sale is made from a state that has a sales tax but the buyer is in a state that does not, no tax collection is required on that sale. Of course, there is always the possibility that I could be wrong (nooo...really?) but that is my understanding. In any case, I think it's tacky for the seller to come back to the buyer after the fact and ask for more money.

YM

Ken Fitzgerald
03-29-2008, 12:22 AM
I suspect Mini-Max won't be the only company doing this either. This could get interesting.

Mike Heidrick
03-29-2008, 12:37 AM
You know, people who call me like this get treated exactly how I am being treated.

Next time you get called with a free timeshare vacation, freak out like it is the biggest prize in your life - yelling and screaming You Won You Won!!

If you get called for an extended automobile warranty, let them know you have been looking for a GREAT warranty for your 1978 AMC Gremlin!

When you get the policeman's ball or other firefighter dance call, kindly let them know you will not be doing much dancing with the recent loss of you (pick an lower extremity here). All other foreign war calls get told I am in no position at this time to donate. When they continue on, kindly ask them if they just heard what you said. They usually apologize and kindly hang up every time. Make yourself seem worse off than the group they are collecting for. That is what they are thinking about when they call you so it means more to them. Make it personal.

Some joker calls me about paying some year old sales tax, I think I would argue about something that I can win. A comedian recommended asking them why they have not returned you sweater and theaten that if they do not give you your sweater back you are going to get real real mad and you still have their set of teaspoons. Just freak out on them. A soft wispy sharp voice always makes it seem more freaky to them.

Occasionally you get someone who wants to keep talking. Introduce an annoying sound during everyword they say. High pitch teee sounds works well. Try and mimic the sound of metal resonating during their every word.

They will all hang up before you do.

Will Blick
03-29-2008, 1:05 AM
A selling company is ONLY responsible for charging Sales Tax, collecting it from the buyer, then remitting to the State, WHEN, the company 1) has a sales tax certificate within the state which they buyer resides, AND, the seller has a physical location in the State the buyer resides in. If not, the seller is not authorized and has no obligation to charge sales tax to the buyer and forward it to the buyers State.


This of course is a huge issue in regards to internet sales, as internet companies like Amazon get huge breaks, as they can sell their products 6 - 10 % less than buying them in a bricks-n-mortar store.... the Feds have been trying to plug this hole for some time, as the Bricks n Mortar stores have been screaming for some time, and rightfully so, as this puts them at a big price disadvantage..... and with the internet, everyone shops prices these days.


As Phil eluded to.... the correct procedure is, at years end, you add up all your out-of-state purchases which you did not pay sales tax on, and you submit a USE TAX form which is basically truing up all your purchases you did not pay sales tax on, multiply by your State Sales tax rate, and submit payment to your State Sales Tax division. Of course, most states have no oversight divisions monitoring this, so compliance is minimal at best. Hence the desire for a flat "internet tax" for internet sales, which would then get distributed in some concocted manner not yet determined.... but it would get distributed to the different parties, the bulk going to the State which the buyer resides.


I too am curious what happened here, assuming its not a scam. Its possible CA is cracking down on this, as Arnold is searching for max. State revenue. IMO, the internet came on like gang busters, and our Govt. just doesn't act fast....

Joe Jensen
03-29-2008, 4:11 AM
Paying the state tax on your own reminds me of our nanny years ago. She was awesome, but she insisted on being paid above the table. This was an amazing hassle. I had to deal with 4 separate things, workers comp insurance, unemployment insurance, and then I had to collect state and federal income tax. Getting the appropriate tax IDs was a pain. I ended up going to the state tax office for help in filling out the form for the state. The lady was really nice and as she was helping me, I asked how long she had been responsible for setting parents up as employers formally for nannys. She answered that she had been doing it for 12 years. I then asked if anyone else did that and she said no. Lastly, I asked how often people signed up, and she said I was the first one in 12 years. :mad:

I wonder how many people are following the rules for paying their state the sales tax missed on interntet purchases????

Chris Parks
03-29-2008, 6:49 AM
Pick up a phone and ask them? Seems simple enough to me.

Jason White
03-29-2008, 8:07 AM
Tell them to come and pick up their machine.



I got a call from a lady from Minimax this morning. She said that due to a policy change somehow relating to a new management they were calling past customers (only in CA?) and telling them that Minimax was going to send them out a bill for the sales tax on their equipment purchases.

How is it legal for them to, almost a year and a half later in my case, decide to charge us more? When I was given the final price I believed it to include all extra charges. What was charged on my card was the bill. Now they want to come back and charge me for something that they decided to on a whim?

Has anyone else gotten this call or notification? What's the flimflamdingdang deal here? Are they going to call up Steve Clardy and ask for money from him on the MM16 that they gave him when his roof collapsed? Sheeeeesh!

Doug Shepard
03-29-2008, 8:15 AM
CA retail presence behind this or another company with the same name??
http://www.google.com/search?hl=en&rlz=1T4SUNA_en___US210&q=%22Mini+Max+USA%22+san+pedro+wholesale

Art Mulder
03-29-2008, 8:25 AM
I don't think it's a scam. ... I suspect some states are starting to put pressure on them to collect sales taxes.

Ken, you make sound points. But as I look at this thread I see exactly one person who has received a phone call, and lots of other people speculating. To me that is the biggest hint that this might be a scam or a mistake.

If there were dozens of people who had received a phone call -- for this is not exactly a tiny company -- then I might agree with you.

J. Z. Guest
03-29-2008, 8:29 AM
Well, first I'd call Minimax back, because then at least you know you're talking to the company you think you're dealing with. Confirm it is true they're trying to collect something retro-actively.

Then, tell them this wasn't part of the deal when you bought your machine, and if it were, you wouldn't have bought it. Tell them they can either drop it or give you a full refund and pick up the machine.

Otherwise, you'll see them in court. (and you'll win too)

Brian Backner
03-29-2008, 8:59 AM
Mark,

If you ever get an actual bill from them in the US Mail, AND it turns out to be a scam, make sure you report it to the Postal Inspectors Service. They are the most ruthless enforcement organization in the nation. I started utilizing them a decade ago when someone in LA stiffed me on a transaction that he initiated via a targeted mailing. Let's just say the $300 he got from me worked out to about $60 a year (for the five years he did in a Federal slam somewhere! ). The USPS is very sensitive to someone using the mail for fraudulent purposes - and sending you a fake invoice hoping to collect some overdue sales tax would rightfully be considered mail fraud.

Brian

Butch Spears
03-29-2008, 9:18 AM
Chris said
Pick up a phone and ask them? Seems simple enough to me.
__________________
Chris


Why not call MM and find out if it is them or not? especially before posting a trashing of a company before we really know the true story. MM has been ( to me) nothing but a stand up Company. Then if it is really them ( Give Em He$$ ) but not jump the gun. Butch Spears

Ken Fitzgerald
03-29-2008, 9:39 AM
I got a call from a lady from Minimax this morning. She said that due to a policy change somehow relating to a new management they were calling past customers (only in CA?) and telling them that Minimax was going to send them out a bill for the sales tax on their equipment purchases.


Art,

How many people who have bought products from Mini-Max are members of SMC? We don't know. Therefore, we don't know if Mark is the only person who received a call like this.

If Mini-Max is doing this....when did they start.....The morning Mark posted this?

I am not in any way slamming Mini-Max or any other company and I'm still not convinced this is a scam. It may very well be that states are starting to require people who sell via telephone or the internet to collect sales tax and deliver it to the state involved.

Call Mini-Max and find out if they have instituted this policy and why.

Frankly, if they were going to charge you sales tax, I'd think they'd have to do it at the time and point of sale. In other words, they'd have to inform you and let you know BEFORE you give them your credit card number.

But then again....I'm not a lawyer or a legislaturer and I try to think logically!:D

Mark Rios
03-29-2008, 10:14 AM
I googled the phone number that came up on my phone and it was listed as SMC Group out of Georgia. I've messaged Sam Blasco hoping to get some sort of info on this issue.



It is interesting that no one else, so far, has gotten the same call.........

Eric Haycraft
03-29-2008, 12:02 PM
I googled the phone number that came up on my phone and it was listed as SMC Group out of Georgia. I've messaged Sam Blasco hoping to get some sort of info on this issue.



It is interesting that no one else, so far, has gotten the same call.........

Anything like this where someone calls you and asks for money should be suspect. Always ask for their name and say that you are going to call the company's main switchboard (don't have them give it to you, look it up) and get transferred to them. Never ever ever continue the conversation without going through the company's switchboard. Even if the callerid says it is from company X, callerid is easy to spoof and should not be trusted.

Also, computer security is pretty lax at most companies and getting a customer list is not impossible, so don't rule out a scam just because they know when you purchased and how much you paid. The scammer could also be someone that worked at the company and had access to your records.

Mike Spanbauer
03-29-2008, 12:04 PM
I've an MM, live in CA. and have received no such call... smells AWFUL fishy to me.

Larry Marley
03-29-2008, 12:18 PM
If you live in California and buy (tax free) a tool from a company in Texas, or any other state, and have it shipped to CA, YOU are required by California law to report this to the state and pay California the sales tax on that purchase.

If you declared you made no mail order / Internet purchases on your tax return, and in fact did, you may have more problems than just an unexpected invoice from MM.

Ordering the equipment at a trade show in CA and then having it shipped from out of state may give California cause to go after MM for the Tax.

MM does, or at least did have a salesman living in CA. If the phone / home office was written off as a business expense, CA may see fit to force MM to carry a CA tax id.

"If you tell the truth you don't have to remember anything."
- Mark Twain, 1894

Mike DeHart
03-29-2008, 12:30 PM
You paid the agreed upon price for the product. It is not your fault they failed to add tax if necessary to the order. The tax is now their responsibility. Only thing I can think of is they got audited and busted for not collecting state sales tax. Again its their tough luck they didn't bill it correctly.

And even if you get a letter I would still call the company and verify. And if it is legit, then have a discussion on how they can raise the price of the items 18 months after purchase.

The way your elected politicians wrote the laws you are responsible for the tax whether it's collected by somebody for the state or not.

All you have to do is provide them a copy of the CA Board of equalization use tax return showing you paid the tax directly to the BOE and you are all set. You did pay the use tax on the purchase, didn't you???? http://www.boe.ca.gov/sutax/usetaxreturn.htm

Chances are they are being audited (as someone else mentioned they probably had an employee set foot in the state, leased something to somebody in ca, have a lockbox there, have some tooling at a vendor there, looked at the state on a map (just kidding on that one...) and CA decided they run a business in CA and is making them go back and make sure all the customers did their civic duty and paid their taxes. The next step for the auditor is to create a list of all those customers who did not pay the use tax and pay them a visit.

California is probably the worst of the states I have to deal with at work. They come in every time just before the statute of limitations runs out from the previous audit.

Sales tax sucks. :(
Mike

Brian Kent
03-29-2008, 12:31 PM
I sent an e-mail to MiniMax last night, informing them of the problem and the responses on Sawmill Creek. I wrote as someone who has never purchased from MiniMax but who respects their products - just trying to help them clear things up quickly.

But that was Friday night, so even assuming excellent customer service they might be closed over the weekend.

Brian Kent
03-29-2008, 12:36 PM
This looks like the document from the State of California on Internet Sales Taxes:

http://www.boe.ca.gov/pdf/pub109.pdf

Rye Crane
03-29-2008, 12:46 PM
Mark,

I happened to be speaking with Michael Kahn, the head of MiniMax last week regarding my recent purchase. He informed me that I would be getting a call from SCM, Atlanta, Ga. their parent company to discuss my California state sales tax liability.

Michael said SCM has been through an audit and that they were trying to recover the owed state sales tax on their products delivered in California.

I called my CPA and he said that if MiniMax neglected to collect this sales tax for whatever reason I still owe the "use" tax to the state.

Since SCM the parent company of MiniMax opened a sales and service location at 777 Campus Commons Road, Suite 200, Sacramento, CA 95825 Telephone # 916-565-7626 and also that MiniMax has had a sales office in California, albeit staffed by independent contractors, doesn't negate us end users liability for the sales/use tax owed.

This is another example of being Californicated. I bought three machines in the last two years and owe about 3000. Merry Fricken Christmas.

Rye Crane

Jim Dunn
03-29-2008, 12:49 PM
It would be just like California to be ahead of the game with taxes like they are with auto emisions. Looks like from the pdf publication that ever if a MM rep ever shows up at your shop, after the sale, they are responsible for paying sales tax on all sales in the state. It's a little unclear if a hired delivery company is working for MM or you as the buyer. If MM hires them then they owe sales tax on the sale?

Not that they can come back to you and collect.

I'm not a lawyer or doctor I just like to play like one:)

(Just read the above response and sure enough if MM has an office in CA then they owe sales tax. Not that they can get it from you the end user. Just try and collect, MM, never heard of em.)

Brian Kent
03-29-2008, 1:04 PM
I am curious if this is unique to California - the use tax in general, not just Minimax.

I pay all my taxes, so this is a disturbing development. I have made several purchases (about $2,300) in the last several years, plus a lot of little internet stuff where a significant part of the purchase equation was lack of sales tax. I would almost like to pay the $178.25 today if I could just see the look on the tax processor's face -

"Look! Somebody actually paid the use tax! The first one!"

I have a friend who went to the welfare office to say she had accepted more welfare than she deserved and wanted to pay it back. They tried to kick her out of the welfare office because they didn't know how to handle it. She paid it back, has a clean conscience, and a really great story.

John Callahan
03-29-2008, 1:11 PM
Sounds like a scam to me .......... sure doesn't sound like something MM would do. Best to get it straight from the horse's mouth; call MiniMax.

Rye Crane
03-29-2008, 1:34 PM
Guys,

What you need to understand is that MiniMax did not call up the State of Ca. and ask for an audit. When their parent corporation SCM opened an office in Sacramento the tax suckers like a cancer reached out and visited the Atlanta offices of SCM and got our names and amounts of purchases.

I expect that if I do not pay this tax this year on my state of California return I will get my own visit and trust me you don't want any "new best friends" showing up on your doorstep.

This really has little to do with MiniMax or SCM. It's between the state of California and us. If you bought from Laguna, Felder, or Altendorf (sp?) they would have collected the tax from you at the time of sale. If anything I'm bummed out because now I got caught and have to pay.
At least I get to pay with 1/2 price dollars. Oh and we also get to create a deduction for this use tax paid on our federal forms.

Rye Crane

Ben Rafael
03-29-2008, 1:37 PM
Minimax has at least 1 sales rep in California, therefore they are required to charge and collect sales taxes to customers(who are not exempt from sales taxes) who receive their products in California. This is as of the date that MM has a sales rep or office in Cal. Before that date, or if you receive the product out of state and sales tax has not been paid, the receiver of the product is required to pay the sales tax, which is done when you file your California tax return.

IMO, the state of california will or has requested the names and addresses of all MM sales to residents of cal who were not charged sales tax. It is just a matter of time til those folks get a phone call from MM or a letter from the state of california.

Ben Rafael
03-29-2008, 1:42 PM
And just wait til the govt in calif gets around to Grizzly.
They have no presence in calif and dont collect sales tax.
I dont know why the govt is bothering with MM, Grizzly must have at least 10 times the sales here than MM does.

Steven DeMars
03-29-2008, 1:49 PM
This same thing happened with DELL Computers all over the country. All or most of the state revenue departments have joined a information pool to identify companies that ship large ticket items into their state. I don't know about other states, but in Louisiana, the purchaser is actually the one responsible for PAYING the sales tax. We have just gotten used to the store acting as the tax collector. But in fact this practice is actually considered a convenience for our states TAX PAYERS. They will come back after you with interest and penalties. The companies are handing over the sales records to each state as they request it . . . They are also in the process of suing companies that have "NO SALES TAX CHARGED" in their ads . . . .:mad:

Jim O'Dell
03-29-2008, 2:31 PM
I guess I can see both sides of this. But I do see a difference between a service center and a retail sales office. Think about Amazon. They have a warehouse/shipping facility about 35 miles from me, yet taxes are not charged on what I buy because their sales office is not in state.
I paid tax on my MM because I live in Texas where they are located. I had thought about having the unit shipped to my parent's house in OK, and picking it up from them to save the tax, but it just wasn't worth it. (would have cost me 40.00 in gas at the time, and a whole day, plus the hassle of trying to load it in my van. Well worth the 82.08 I paid in taxes. Except for missing a visit with the parents and and a good meal. :D)
If this was something that MM missed and should have been charging along the way, but failed to, I think it would make for good customer relations to take care of it instead of trying to collect from the customer after the fact. I mean, would you want to tick off your entire customer base in a state like CA? The customer is not going to be happy, because they thought the purchase was free of taxes at the time they made the purchase. It's a no win situation here. But it will be interesting to see how this plays out. Jim.

Shiraz Balolia
03-29-2008, 2:32 PM
And just wait til the govt in calif gets around to Grizzly.
They have no presence in calif and dont collect sales tax.
I dont know why the govt is bothering with MM, Grizzly must have at least 10 times the sales here than MM does.

This is not our fight, but since Grizzly's name was brought up I'll comment.

If a company has presence (also known as nexus) in a state, then they must collect sales tax on all sales within that state. I suspect the company in question did not know that they had a nexus in the state of Ca because of their physical location.

Legally, even if sales tax is not collected by the seller, one must "declare" it and pay use tax within the state they live in. Most home shops and many businesses do not do this. I have never heard of an individual get audited by the state for use tax, but businesses routinely get audited. Going back to the customer after a year to try to collect sales tax would probably be a futile attempt, but if you don't pay it, they will certanly have to. I suspect they were audited and have already paid the due taxes as well as interest and penalties.

Grizzly has presence in three states, PA, MO and WA, and we collect sales taxes for sales within those states. If you are from another state and walk into our showroom, we charge sales tax. I believe there are five states that have no sales tax, Alaska, Oregon, New Hampshire, Delaware and Montana (been a while so correct me if I am wrong), and customers that walk into our showrooms from these states are exempt. We do have paperwork that needs to be filled out, though, for these customers.

David DeCristoforo
03-29-2008, 2:48 PM
So Shiraz, may I ask you a question? As a vendor would you consider this business of coming back on a customer "after the fact" to be a "fair" practice? Would you do this? I am not trying to dispute whether or not the OP should have been taxed on his purchase. It just seems like very bad business to handle it this way. I am curious how you as a vendor of some repute would handle a similar situation.

YM

Richard Wolf
03-29-2008, 2:55 PM
I don't know if this is a scam or not, let's assume not. It seems like a lot of people think their responibility to MiniMax ends when the check clears. If the State of Ca. is putting their hands into MiniMax's pocket for uncollected sales tax, which the state feels you should have paid in the first place, I see nothing wrong in asking for it post date.
MiniMax didn't end their relationship with you when the check cleared. They are fast to supply you with tech support, information, service, parts and anything else you can think of. If you have a problem, you wouldn't be happy if MM said, your machine, your problem.
I am not happy about fixing other peoples mistakes and doing someone else's job, but this seems like the State of CA is finding a loophole for extra revenue. It should not be MM problem alone.
No, I would not be happy if I had to pay sales tax on my two MM machines, but if it is my responibility, than I would mail the check tomorrow.
I also realize that some people may feel this is a hardship, but don't take a attitude with MM, they shouldn't be paying your bill.

Richard

Matt Meiser
03-29-2008, 2:56 PM
Sounds to me like you are going to have to pay it. It sounds like maybe they were supposed to collect it at the time, but if they weren't you were responsible to pay it. If they were supposed to collect it and didn't, you may technically be in the "right", but I'd be worried about a) support on your machinery in the future--i.e. "Sorry Mr. Rios but we seem to be out of those parts you need." and b) a visit from the CA tax authorities. As much as it stinks, it sounds to me like their solution is the safest for you. That is once you've verified with MM that this is legit and assuming you didn't already pay the tax yourself.

It sounds like Rye owes $3K. If they have very many people with that kind of tax liability, I can see why they aren't absorbing the cost themselves--even if legally they don't have a leg to stand on.

Dell must have an office in Michigan, because we've always paid them sales tax. Ordering stuff for work that wasn't taxable (i.e. when it was for a municipality) always took sending them something to state that it wasn't taxable. McFeely's charges us sales tax too. Maybe MI and WI have reciprocity on that one since we are bordering states.

Joe Chritz
03-29-2008, 2:58 PM
Grandpa always told me you don't get nothing if you don't ask.

My feelings on the issue.

If you live in the state and paid your use tax like required by law then you can tell them to pound sand with a clean conscience. If you didn't pay the use tax, there by skirting the tax owed, then you should pay the tax so MM can send it where it is supposed to go.

There ain't no such thing as a free lunch.

If you don't like the current set up of tax (which I don't, but that is another discussion) then exercise your rights and take steps to get it changed.

I don't agree that it is a "right' for MM to go back to collect but the amount in question is likely a very sizable amount. Someone will pay it at some point. See the above statement about no free lunch.

Joe

Ken Fitzgerald
03-29-2008, 3:03 PM
YM.....

For a business to try to collect taxes AFTER the sale is, neither "fair" nor "unfair". While I'm not a lawyer, I'd guess they'll have a tough time doing it if they didn't declare and collect it at the time and point of sale. It sure makes them look silly, though.

Shiraz Balolia
03-29-2008, 3:06 PM
So Shiraz, may I ask you a question? As a vendor would you consider this business of coming back on a customer "after the fact" to be a "fair" practice? Would you do this? I am not trying to dispute whether or not the OP should have been taxed on his purchase. It just seems like very bad business to handle it this way. I am curious how you as a vendor of some repute would handle a similar situation.

YM

I knew that question was coming :rolleyes:.

We would not contact customers a year down the road and ask for money. Over the years we have "eaten" a ton of money due to employee errors in undercharging, but as time went by and situations arose, we would put processes in place to avoid something happening a second time.

The simple answer to your question is "no", but then, we try not to put ourselves in that position to begin with.

David DeCristoforo
03-29-2008, 3:12 PM
"The simple answer to your question is "no", but then, we try not to put ourselves in that position to begin with."

Thank you....

YM

Steven DeMars
03-29-2008, 3:22 PM
If you do research on this, you will find this an after thought on the part of the different states . . . but regardless of whether MM collected, did not collect it, should have collected it or should not have collected it.

The fact remains when you file your state income tax in Louisiana and all other states who have moved on this . . . .

YOU THE PURCHASER OF THE PRODUCT ARE ULTIMATELY RESPONSIBLE FOR THE SALES TAX ON THE ITEMS YOU PURCHASE.

No I don't like it, but that is the way it is . . .you can send it to MM for the actual tax owed or to your state when they bill you with interest and penalties 2 to 3 years from now when they get around to you. Going back to the companies first is the way the program works. Trust me, your state revenue department already has your name and the amount of the purchase . . . .and most important, the amount they say you owe them . . . Louisiana has jumped on this big time because you can't buy anything here but food and beer . . .so if you want anything of quality, or as I say it, the ultimate whatever, you get it somewhere else . . . out of state . . A small engineering comapny here in town purchased (3) CAD machines (fast computers) from a company in Colorado, $4,500.00 each over three years ago, they got their TAX BILL from the state in January this year.

Ben Rafael
03-29-2008, 3:31 PM
This is not our fight, but since Grizzly's name was brought up I'll comment.

If a company has presence (also known as nexus) in a state, then they must collect sales tax on all sales within that state. I suspect the company in question did not know that they had a nexus in the state of Ca because of their physical location.

Legally, even if sales tax is not collected by the seller, one must "declare" it and pay use tax within the state they live in. Most home shops and many businesses do not do this. I have never heard of an individual get audited by the state for use tax, but businesses routinely get audited. Going back to the customer after a year to try to collect sales tax would probably be a futile attempt, but if you don't pay it, they will certanly have to. I suspect they were audited and have already paid the due taxes as well as interest and penalties.

Grizzly has presence in three states, PA, MO and WA, and we collect sales taxes for sales within those states. If you are from another state and walk into our showroom, we charge sales tax. I believe there are five states that have no sales tax, Alaska, Oregon, New Hampshire, Delaware and Montana (been a while so correct me if I am wrong), and customers that walk into our showrooms from these states are exempt. We do have paperwork that needs to be filled out, though, for these customers.

Shiraz,
I did not mean to attack or criticize Grizzly. I know that california purchasers of grizzly products are responsible for paying the sales tax through the state of cal, not through grizzly.
was only stating that the state of california has a larger bonanza by going after your customers in california, rather than MM.

Bill Wyko
03-29-2008, 4:11 PM
I called them yesterday but they were closed. I did leave a message though. I'll let you know if they return my call.

Ed Brady
03-29-2008, 4:22 PM
It may be legit. Most states call it a sales and USE tax. When we lived in Virginia we bought custom furniture in NC and had it shipped to our home. Apparently Virginia tracks shipments such as ours and required us to pay a use tax. The difference is that we got the bill directly from the state, not the furniture company. It was a nasty surprise and we had to pay the state government.

We lived in California for a while and I know they are nasty about collecting tax.

Here in Colorado I believe the law says that we need to pay a use tax on items we buy outside the state, but it is difficult to enforce on most small internet purchases. Big items that are trucked in are a different story.

EDB

CPeter James
03-29-2008, 4:55 PM
This is one good reason to live in New Hampshire. Our neighbors on three sides of us all have sales taxes and out state border towns have large shopping centers that cater to all their needs. It is great for our economy. The other states used to send "revenuers" to watch what people from their states were buying, but we retaliated by arresting the tax folks for loitering. It made good reading in the papers. We also have the lowest priced liquor around and out stores are run by the state. We have strategically placed liquor stores on the interstates coming into and leaving New Hampshire. Our neighbors buy it by the caseload. There are several woodworking stores located in border towns. It is a good place to buy that big piece of equipment. You can save 5% or more.

BTW: My wife bougt a sewing machine in Maine and we saved $500(that is right, five hundred dollars) by having it shipped to New Hampshire.


CPeter

Sean Troy
03-29-2008, 5:27 PM
Almost makes me happy I can't afford any more tools right now.....almosthttp://sawmillcreek.org/images/icons/icon9.gif

JohnT Fitzgerald
03-29-2008, 5:30 PM
I'd tell them to 'talk to the hand'.

Tom Leasure
03-29-2008, 5:34 PM
A company the size of MM most likely did not forget the sales tax - if it needed to be charged. Sounds like a scam.
To bad scammers didn't put as much effort into working as they do scamming - the country might run a little bit better !! MHO:rolleyes::rolleyes:


Tom L.

Mike DeHart
03-29-2008, 5:39 PM
I am curious if this is unique to California - the use tax in general, not just Minimax.

I pay all my taxes, so this is a disturbing development. I have made several purchases (about $2,300) in the last several years, plus a lot of little internet stuff where a significant part of the purchase equation was lack of sales tax. I would almost like to pay the $178.25 today if I could just see the look on the tax processor's face -

"Look! Somebody actually paid the use tax! The first one!"

I have a friend who went to the welfare office to say she had accepted more welfare than she deserved and wanted to pay it back. They tried to kick her out of the welfare office because they didn't know how to handle it. She paid it back, has a clean conscience, and a really great story.

Most states I have to deal with do it the same way. NY has a little check box on the income tax form that you can check off and pay a "standard" amount and not have to worry about it coming up if you ever get audited. I think it's about $25 a year to not have to worry about. At 8.75% it doesn't take much to cover it.

Brad Townsend
03-29-2008, 5:54 PM
This is one good reason to live in New Hampshire. Our neighbors on three sides of us all have sales taxes and out state border towns have large shopping centers that cater to all their needs. It is great for our economy. The other states used to send "revenuers" to watch what people from their states were buying, but we retaliated by arresting the tax folks for loitering. It made good reading in the papers. We also have the lowest priced liquor around and out stores are run by the state. We have strategically placed liquor stores on the interstates coming into and leaving New Hampshire. Our neighbors buy it by the caseload. There are several woodworking stores located in border towns. It is a good place to buy that big piece of equipment. You can save 5% or more.

BTW: My wife bougt a sewing machine in Maine and we saved $500(that is right, five hundred dollars) by having it shipped to New Hampshire.


CPeter
So I guess its "Live Tax-free, or Die"??;)

Doug Shepard
03-29-2008, 6:39 PM
...
was only stating that the state of california has a larger bonanza by going after your customers in california, rather than MM.

Maybe from a total dollar amount, but it would probably cost them a lot more to collect it as it probably means contacting a lot more buyers for a lot less return. The MM machines probably represent a bigger return on the effort invested per buyer.

Matt Bickford
03-29-2008, 7:13 PM
sellers are not responsible for collecting sales tax in interstate transactions when they have no place of business in the state of the buyer. That is why you'll often see/hear things like "PA buyers must pay sales tax."

Example: if I buy a plane from Lie Nielsen (in ME) over the phone or over the internet they will not collect sales tax despite there being a sales tax in both ME and PA. The reason is because I do not owe ME any tax. I do, however, owe PA tax. It is my responsibility as an out of state buyer to send this tax to the state. If I buy a plane while they are at a convention in PA they will collect and pay PA tax.

Peter Quinn
03-29-2008, 7:32 PM
Here in the great state of Connecticut there is most definitely a use tax, in fact if you physically purchase goods out of state for use in state and pay the other state's sales tax, and this tax rate is lower than CT's, they want a check for the difference! They want you to pay 6.5% tax on everything you buy everywhere always. If you have something shipped here, you owe the tax.

That being said I know few people that willingly declare use tax, and of those few declare all of it. There have been high profile stings on certain luxary items and attempts to track internet purchases but the effectiveness has been limited. There are amnesty periods offered here periodically to allow people who may have 'forgotten' their tax responsibility to pay without penality after which there are generally a few well publicized stings and prosecution.

My concern reading this post is that CA has determined Minimax has a presence there, has audited them, has your name and purchase amount, and is giving both parties an amnesty opportunity to pay the tax after which they will get ugly. In the same position I would verify the situation with the vendor then pay and get a receipt.

Minimax is likely being held over the same barrel you are. I wouldn't hold a grudge against one of wood workings finest tool vendors for a situation that may be beyond their control and I wouldn't expect them to pay your tax. If you feel disgruntled about taxation I suggest a call to your congress person who will likely offer nothing but may be sympathetic.

One thing which is certain, my attorney charges more per hour than the tax on any single machine I have purchased, so an opportunity to resolve a tax issue without including my attorney or incurring late penalties is one I would consider fortunate.

John Bush
03-29-2008, 7:46 PM
Washington State has stepped up their auditing and collection of "use tax" over the last ten years. They seem to target a specific business type at a time, then move on to another businss group. I wasn't aware of the "use tax" and I recieved a letter from the state Dept. of Rev. asking that I provide all my purchasing records for the previous five years. I sent two boxes of records to my accountant and he handled it for me. He said that all his Dentist clients had been audited that year and he estimated fairly accurately what I would owe in back taxes and penalties. I didn't think too much of it until five years later I was audited again and my accountant again said they were hammering the Dentists that year. I now keep records of all out of state or non taxed purchases and pay with my quarterlies so I don't get spanked again.

Art Travers
03-29-2008, 7:49 PM
How silly, how many Californians ever do this ...There is no way for
California ever to determine these purchases. California has a terrible
budget problem so they are pushing from any end to collect what they can..

Ben Rafael
03-29-2008, 9:24 PM
How silly, how many Californians ever do this ...There is no way for
California ever to determine these purchases. California has a terrible
budget problem so they are pushing from any end to collect what they can..

Nope. They can catch alot of it.
The Franchise Tax Board and Board of Equalization can audit your credit card records, which they do to many people. All those credit card payments to Amazon and other internet businesses will be questioned. Out of country credit card payments will also be examined. Paying cash is the only way to avoid this trap.

Greg Cuetara
03-29-2008, 9:45 PM
Not to take away from the OP but the State of Maine is currently trying to figure out how to charge sales tax to everyone if an item is shipped from Maine. Being that LLBean is in the state and ships a great deal out of state our great state wants their share of everyone else's money. I suspect that this is coming for a lot of states around because tax revenues are down and they want their buck.

To the OP, you owe your money to the state not to MM. If you did not pay tax then the state is coming after it. I know Maine has gone to internet companies and tried to get records to go after the 'use' tax. It is still very sketchy if states have this right or not. We should have privacy in any purchases we make over the internet or out of state. A question I have is, can the state prove that you kept the machine in state. Eventhough it was shipped to CA you could have taken it out of state and they wouldn't know or you could have given it as a gift which is now being used in another state. How can they prove it is still in the state without actually going into your house? Can they just go into your house without a warrent? Would they go through that trouble...maybe...you could always fight it and ask them to prove it is still in CA but then are you being honest or dishonest. That is a question for you to decide.
Good luck,
Greg

Ben Rafael
03-29-2008, 9:48 PM
Not to take away from the OP but the State of Maine is currently trying to figure out how to charge sales tax to everyone if an item is shipped from Maine. Being that LLBean is in the state and ships a great deal out of state our great state wants their share of everyone else's money.

That's a good way to get LL Bean to leave the state, not to mention other businesses that rely on mail order sales.
I do believe it is unconstitutional to tax sales out of state, but that certainly wouldn't stop any state from trying it.

Robert Waddell
03-29-2008, 10:06 PM
YOU THE PURCHASER OF THE PRODUCT ARE ULTIMATELY RESPONSIBLE FOR THE SALES TAX ON THE ITEMS YOU PURCHASE.



That's how the law reads here in North Carolina. The seller is to collect the sales tax and remit to the state DOR but if they fail to, it does not change the fact that the customer owes the tax. Also, the tax is to be added on top of the selling price and is not part of the price. I sell ww'ing at retail and buy supplies sales tax exempt, so I've had some experience with this.
Rob

Butch Spears
03-30-2008, 7:45 AM
Peter said
" One thing which is certain, my attorney charges more per hour than the tax on any single machine I have purchased, so an opportunity to resolve a tax issue without including my attorney or incurring late penalties is one I would consider fortunate."

How true, and the penalty and interest is at a higher rate.

Most of us have always heard ( there are only 2 things that are SURE in life) " Death and Taxes" They are gonna get it one way or the other.

John Callahan
03-30-2008, 10:51 AM
In Maine if it crawls, walks, is deceased, animal, vegetable, or mineral there will be some sort of tax on it. Awhile back someone from the state came into my brother's business.......... he now has to "license" his air compressor at $100+ a year.

Pat Germain
03-30-2008, 11:46 AM
I'm originally from California and I have a lot of family still living there. Retroactive taxation is typical modus operendi for the state of CA.

One of my cousins is a CA resident who has been living and working in Japan for many years. Awhile back, CA got mad because wealthy Hollywood types were moving all their money offshore, collection a monthly "allowance" and claiming only that allowance as income. CA had a cow, changed the tax law and MADE IT RETROACTIVE for several years.

Thus, my cousin in Japan got a tax bill for several years previous from the state of California because he makes his money "offshore".

This situation with MM is not a scam. It's not illegal. It's just typical California. Just yesterday I heard a member of the CA state legislature on the radio talking about their current budget crisis. He just kept saying over and over, "Raise taxes, raises taxes, raise taxes. Can I make it any simpler? Raise taxes!".

So, it should come as no surprise when you buy a big ticket machine and get a retroactive tax bill from the state of CA.

Rick Gifford
03-30-2008, 12:28 PM
So what happens if this is 100% legit, and you throw the bill in the trash?

What are they going to do?

I doubt something like this could be held up in court. But Im no legal expert.

Ben Rafael
03-30-2008, 1:01 PM
So what happens if this is 100% legit, and you throw the bill in the trash?

What are they going to do?

I doubt something like this could be held up in court. But Im no legal expert.

You're not from California, are you?
They will send you a second bill, if you disregard that then They will go after your bank accounts, attach your wages....if that fails they will put a padlock on your home. No home? They will have you arrested.

You have no idea how much hassles I've had with california tax authorities and I've always paid what I have owed. The agencies here share info and if one of them makes an error the others come after you whole hog and you have to clear up the error with each and every agency. When I say that the govt can go to the devil I have good and legitimate reason for it. The worst is that you have to prove that they are wrong.

Also, there is a story in the L.A. Times today about Nevada trying to get businesses to move out of Calif to Nevada because of Calif tax and business burdens. You can see it online at latimes.com for those who are interested.

David DeCristoforo
03-30-2008, 1:07 PM
It may not be a scam or "illegal" but it's still "bad business". The state of California (and other states as well) may be changing the rules but California has always had a sales tax. It has always been the responsibility of the retailer to collect this tax at the time of the sale and pay it to the state. Obviously, it is the customer who pays the tax. But how many times do you look at your receipt to verify that you were charged the tax? I still think that, regardless of the legitimacy of the tax liability itself, it is "funky" to come back on a customer a year and a half after the fact and demand additional money.

YM

Ben Rafael
03-30-2008, 1:27 PM
It is not the responsibility of a retailer with zero presence in calif to collect the sales tax. It is the responsibility of the customer.

Mike Heidrick
03-30-2008, 1:36 PM
Send them back an invoice showing you paid.
Write "Sales tax included "on the invoice, make a copy, and drop it in the mail. Done.

Pat Germain
03-30-2008, 7:15 PM
Ben is spot-on here. Because the state of CA has the population and the economy of a large nation, they have a lot of power and they use it. I don't want to get spanked here for talking politics. I'm just stating facts. I'm not giving my opinion.

If the state of CA decides you owe them taxes, you pay them. It's that simple. The consequences are just too harsh to ignore it. Unfortunately, you can't simply tell them you paid the tax during purchase and be done with it. California is the most regulated state in the country. It's almost like Switzerland where everything is either prohibited or mandatory. If the state decides you owe more, you pay more and, unlike most other states, they have an army of enforcers to make sure you pay.

Tom Veatch
03-30-2008, 7:16 PM
You're not from California, are you?
They will send you a second bill, if you disregard that then They will go after your bank accounts, attach your wages....if that fails they will put a padlock on your home. No home? They will have you arrested.

You have no idea how much hassles I've had with california tax authorities ...

I didn't see any indication that the OP was dealing with the CA tax authority. Perhaps I missed that somewhere along the line, but I got the impression the communication was from Minimax, not CA

Jim O'Dell
03-30-2008, 9:01 PM
Tom, you are correct, but this discussion has transformed to CA being the one asking for the money through Mini Max, and if you don't pay through MM, you can, and will pay to CA. I'm interested to see MM's official word on these proceedings. Hopefully tomorrow? Jim.

Jim Dunn
03-31-2008, 6:11 PM
Nobody has called MM and asked to clear this up??

Mark Engel
03-31-2008, 7:37 PM
If the state decides you owe more, you pay more and, unlike most other states, they have an army of enforcers to make sure you pay.

Maybe if they had fewer members in their 'army of enforcers' they wouldn't need as much tax revenue to keep the state budget balanced.

I think I read something somewhere once upon a time that about 35% of the moneys paid in taxes are used to enforce the payment of those taxes.

Mike Gabbay
03-31-2008, 8:10 PM
Hear me now and believe me later! Don't be a girly man and think you can mess with the GOVENATOR! :cool: I'll be back!:eek:

As much as I hate to say it, we are supposed to pay sales tax for these purchases. In the mid-Atlantic states (VA) there is a lot of purchasing of furniture directly from NC. At one time, the VA state troopers would stop furniture trucks to verify who the buyer was and then the state would bill them for the sales tax. I was always under the impression that your home state was the state that would collect the tax not the state of the retailer. In the end you probably should pay it. It beats the longer term hassles of the tax man.

Scott Whiting
04-01-2008, 12:14 PM
A bit of history here: Some years back a small abrasives company by the name of Klingspor lost it's argument with the state of Arizona that having sales people in this state did indeed constitute a presence here. They had to open their books to the state. In order to reduce the fines they went out and tried to collect the taxes. I had in fact paid use tax on those purchases and had the paperwork to prove it. Many of the larger companies that had not paid it were somehow selected for a "random" audit of their use taxes. So it is not just California that goes looking for lost revenues.

Ben Rafael
04-01-2008, 12:56 PM
A bit of history here: Some years back a small abrasives company by the name of Klingspor lost it's argument with the state of Arizona that having sales people in this state did indeed constitute a presence here. They had to open their books to the state. In order to reduce the fines they went out and tried to collect the taxes. I had in fact paid use tax on those purchases and had the paperwork to prove it. Many of the larger companies that had not paid it were somehow selected for a "random" audit of their use taxes. So it is not just California that goes looking for lost revenues.

True. But calif goes after people even if they dont live in calif.
This is a slight aside, but, they have gone after people who have worked in cal, after they retired they moved to other states. The calif tax authorities billed these no longer calif residents for taxes due on their retirement earnings that were saved during their residency in calif. I dont remember how high in the court system this got, but the courts told calif to go pound sand.

Eric Haycraft
04-01-2008, 1:02 PM
The IRS' budget is 11 billion dollars (enforcement is 4.925 billion).. The US income tax receipts are 1,247 billion dollars. Not exactly 35 percent. I doubt that the state of california is skewed much from the federal govt in this regard.

Dirk Lewis
04-01-2008, 1:34 PM
So....any MiniMax reply yet?

Dick Sylvan
04-01-2008, 2:01 PM
Well, I just bought an item from MM and was told that they collect sales tax from buyers in 3 states-Texas, where their sales office and I am located; Georgia, where their warehouse is; and California, where, I guess, the sales tax Nazis are located. I don't think they have an operation there, but I would venture an educated guess that the Nazis are going around the country and putting pressure on sellers of big ticket items.

Ken Fitzgerald
04-01-2008, 2:10 PM
Folks,

I checked. Mini-Max has an employee and an office in CA.

Many states have a couple of questions on their state income tax forms.

1. Have you bought any thing via the internet this during this tax year and not paid sales taxes on them?

2. Have you bought anything via telephone this past year and not paid sales taxes on them?

The forms go on to explain that you are obligated to pay an "end user" tax on them that figures out to be equivalent to the states sales taxes.

Get over it. Some states are requiring you either pay sales taxes or "end user" taxes. While it may be new......it should not surprise you. You don't like it.....call your congressman....change it........Nazis?......That's a little strong......outlandish.......over zealous...IMO....

Ben Rafael
04-01-2008, 2:30 PM
Nazis is inappropriate. It is an insult to those who were murdered, tortured and suffered under the nazis.

Wilbur Pan
04-01-2008, 2:48 PM
Well, I just bought an item from MM and was told that they collect sales tax from buyers in 3 states-Texas, where their sales office and I am located; Georgia, where their warehouse is; and California, where, I guess, the sales tax Nazis are located. I don't think they have an operation there, but I would venture an educated guess that the Nazis are going around the country and putting pressure on sellers of big ticket items.

And another thread gets added to the list of internet discussions confirming Godwin's Law (http://en.wikipedia.org/wiki/Godwin's_law). :rolleyes:

Mike Henderson
04-01-2008, 3:11 PM
And another thread gets added to the list of internet discussions confirming Godwin's Law (http://en.wikipedia.org/wiki/Godwin's_law). :rolleyes:
Yep, but this thread almost made it to 100 posts before the Nazis showed up. That's not too bad.

Mike

Joe Chritz
04-01-2008, 3:38 PM
I suppose the people who complain about sales tax don't drive on the roads, use any public or government services or otherwise benefit from any of it.

TANSTAFL (there ain't no such thing as a free lunch)

Comparing tax agencies / government to Nazi's or any other derogative group is really insulting the entire population of that particular area. Government has functions to remove portions the people don't like. If all your neighbors are good with it you are probably out of luck.

Don't like living in a republic, try communism or a dictatorship.

Joe

Charles P. Wright
04-01-2008, 3:52 PM
Folks,

I checked. Mini-Max has an employee and an office in CA.

Many states have a couple of questions on their state income tax forms.

1. Have you bought any thing via the internet this during this tax year and not paid sales taxes on them?

2. Have you bought anything via telephone this past year and not paid sales taxes on them?

The forms go on to explain that you are obligated to pay an "end user" tax on them that figures out to be equivalent to the states sales taxes.
The convenient thing about NYS at least is they have a "safe harbor" number that you can use for any purchases < $1000. You only need to itemize for those larger than $1000.

Jeff Considine
04-01-2008, 4:18 PM
for what it's worth - there is a possiblity that they may have been audited by the state of CA and were assessed a tax liability for a sales (probably many similar sales since CA doesn't typically pursue small settlement claims, particularly out of state)

It's unusual, but not uncommon for companies who have have failed to collect sales tax to attempt to recover it from the consumer rather than come out of pocket to pay it.

As someone else said, it is the consumer's obligation to pay sales tax, the company's obligation to collect and remit the tax, and the state's obligation to spend it as unwisely as they possibly can.

No opinion as to what you should or should not do, I'd be pretty unhappy if I were in your shoes, but if they had invoiced it correctly when they sold it, you would have paid it then.

I'm not employed by the state, just worked for a company that lost an assessment from the state of NY for a similar kind of thing. States have become very aggressive about chasing revenue sources wherever they can find them since it seems they've sucked all the natives dry...

just my 2c

Jeff

Mike Henderson
04-01-2008, 4:20 PM
True. But calif goes after people even if they dont live in calif.
This is a slight aside, but, they have gone after people who have worked in cal, after they retired they moved to other states. The calif tax authorities billed these no longer calif residents for taxes due on their retirement earnings that were saved during their residency in calif. I dont remember how high in the court system this got, but the courts told calif to go pound sand.
This was not money saved by the retired people but payments from a company pension fund. The theory was that you earned the money while working in CA so you should pay tax on it (in essence, each pay period the company was putting some untaxed money aside to pay you when you retired). The fact that you did not take the money until later didn't affect the fact that it was earned in CA during the years you worked there and had not been taxed.

Congress passes a law that prevented states from collecting state income taxes on retirement payments, across state lines. So now, if Nevada had an income tax and you moved there, they could legally tax your pension payments, but CA could not. The Feds can still collect taxes on it.

Mike

Ben Rafael
04-01-2008, 4:25 PM
This was not money saved by the retired people but payments from a company pension fund. The theory was that you earned the money while working in CA so you should pay tax on it (in essence, each pay period the company was putting some untaxed money aside to pay you when you retired). The fact that you did not take the money until later didn't affect the fact that it was earned in CA during the years you worked there and had not been taxed.

Congress passes a law that prevented states from collecting state income taxes on retirement payments, across state lines. So now, if Nevada had an income tax and you moved there, they could legally tax your pension payments, but CA could not. The Feds can still collect taxes on it.

Mike

Thanks for the clarification.

Dick Sylvan
04-01-2008, 4:36 PM
I did not mean to offend and I apologize to any that I did.

Jerome Hanby
04-01-2008, 4:39 PM
Getting the talk back around to taxes, the primary use of a lot of Government seems to be removing pieces from the people they don't like...


Government has functions to remove portions the people don't like.
Joe

Bill Wyko
04-01-2008, 4:40 PM
So far, no return call from anyone.

jeremy levine
04-01-2008, 4:42 PM
The convenient thing about NYS at least is they have a "safe harbor" number that you can use for any purchases < $1000. You only need to itemize for those larger than $1000. Still I recall NY sending tax agents to New Jersey IKEAs to look for "safe harbor" cheats.

Jim O'Dell
04-12-2008, 11:02 PM
Just curious if anyone has heard anymore from Mini Max. Hope I'm not beating a dead horse. Jim.

Skip Rederscheid
04-14-2008, 10:56 AM
Got a phone call Wednesday, and a bill on Saturday. I assume if do not pay Mini Max, the State of California will contact me directly and impose penalties and interest.

Mini Max claimed was an internal computer glitch that did not charge USE tax.

Jim O'Dell
04-14-2008, 11:50 AM
Thanks for the update Skip. Inquiring minds and all that.:)
By the way, welcome to the Creek! Jim.

Garth Keel
04-14-2008, 12:35 PM
As a retired CPA who dealt with Ca Sales and Use taxes, it appears that MM was audited by Ca because they had "nexus" in Ca. They were assessed the Use Tax on the sales to Ca residents because the machines were shipped from O/S to the Ca customers and not picked up in state from MM. The "Use Tax" is not new. Sales Tax started in Ca in 1933 and the Use Tax started in 1935. It is easier for the customers to verify the tax amount owed (with no interest added) and pay it to MM. Legally do they have to? Ca will have collected the tax from MM so they will be satisfied. Can MM sue. Yes, but will they win and will they really want to do that? The bottom line is you (Ca purchaser) should have been charged the Use Tax up front. MM made a mistake. Ethically, pay the tax you should have payed before. Do what is right even if it costs you a little money. You don't have to like it. :o

Scott Kilroy
04-14-2008, 1:37 PM
...pay the tax you should have payed before. Do what is right even if it costs you a little money. You don't have to like it. :o

But what if you made the purchase based on the total price you expected to pay? For example if another vendor had a similar product but didn't have a CA office I'm assuming you wouldn't have to pay the tax at all. It seems like the charge should be 100% on the company selling the product.

Matt Bickford
04-14-2008, 2:10 PM
buying something out of state does not make the transaction tax-exempt. You owe CA sales tax if the product is sent and used in CA. You even owe it if the product was bought and shipped from Delaware, which has no sales tax.

Brian Kent
04-15-2008, 12:48 AM
That does change the equation on my buying choices, but now that I know the rules, I'll just figure in the total with use tax when I decide what to buy.

Joe Jensen
04-15-2008, 12:50 AM
buying something out of state does not make the transaction tax-exempt. You owe CA sales tax if the product is sent and used in CA. You even owe it if the product was bought and shipped from Delaware, which has no sales tax.

Yes, we are all liable to the state we live in for all online purchases where tax was not collected...joe

Brett CoughlanAus
04-15-2008, 8:25 AM
One word...unbelievable:eek:

Peter Quinn
04-15-2008, 10:10 AM
Humm...when purchasing a machine you may find venders who will not charge you the use tax and it may be difficult for CA to find you and charge you in many cases, but you owe the tax either way. My state has very similar use tax requirements. I guess the real question is can you find a way to duck the tax when purchasing.

I have personally yet to buy a major machine where the sales tax represented the swing vote in my decision, and a calculated tax evasion scheme is a rather strange method to use for making purchasing decisions in any event. I dislike taxes as much as anyone, but I have never tried to convince myself I don't owe them.

Scott Kilroy
04-15-2008, 12:55 PM
OK I may be beating a dead horse but this is the first time I've come across the term "use tax" do other states do this?

Matt Meiser
04-15-2008, 1:22 PM
I'm not sure if the call it "Use Tax", but Michigan requires you to declare your mail order purchases when doing your income tax. There's two methods--if you have all smaller purchases you can just pay a rate based on your income. If you have a big purchase or a lot of purchases, you have to itemize.

There's numerous other posts about it in this thread.

Jerome Hanby
04-15-2008, 1:47 PM
This is from a Wiki, so...


A use tax is a type of excise tax (http://en.wikipedia.org/wiki/Excise_tax) levied in the United States (http://en.wikipedia.org/wiki/United_States). It is assessed upon otherwise "tax free" tangible personal property purchased by a resident of the assessing state for use, storage or consumption of goods in that state (not for resale), regardless of where the purchase took place. The use tax is typically assessed at the same rate as the sales tax (http://en.wikipedia.org/wiki/Sales_tax) that would have been owed (if any) had the same goods been purchased in the state of residence. Typical purchases that require payment of use tax include those done while traveling (for things carried or sent home), through mail order, or purchases via telephone or internet.
For example, a resident of Massachusetts (http://en.wikipedia.org/wiki/Massachusetts), which has a five percent "sales and use tax" on certain goods and services, purchases non-exempt goods or services in New Hampshire (http://en.wikipedia.org/wiki/New_Hampshire) for use, storage or other consumption in Massachusetts. Under New Hampshire law, the New Hampshire vendor collects no sales taxes on the goods but the purchaser/user must still pay five percent of the sales price directly to the Department of Revenue in Massachusetts as a use tax. If the same goods are purchased in a U.S. state that does collect sales tax for such goods at time of purchase, then whatever taxes were paid by the purchaser to that state can be deducted (as a tax credit (http://en.wikipedia.org/wiki/Tax_credit)) from the five percent owed for subsequent use, storage or consumption in Massachusetts. (Clarifying Note: With few hair-splitting exceptions, no state's vendors will charge the native sales tax on goods shipped out of state. New Hampshire vendors, however, do not omit tax because something was shipped to Massachusetts or some other state; rather, they omit sales tax because New Hampshire does not impose a sales tax in the first place.)


OK I may be beating a dead horse but this is the first time I've come across the term "use tax" do other states do this?

Jim Becker
04-15-2008, 4:20 PM
There was an article recently on MSNBC.com indicating that CA was going after this with more fervor at this point.

Regarding use tax, some states are including provisions for this on their state income tax returns; others require a separate form. All "expect" residents to fess up and pay the tax on items they purchase elsewhere tax-free (such as a PA or NJ resident driving to DE to shop) or via the Internet from a vendor that does not have a presence in the state of residence of the buyer.

Dick Strauss
04-15-2008, 6:20 PM
I know of folks who bought furniture from the showrooms in NC and had it delivered to their home in FL. At the end of the year, they got a tax bill from FL. I guess the truck had been stopped at the state line and the paperwork copied. The state tied the delivery to their name/address and charged them tax on the interstate purchase.

Also, if you purchase a car in one state and later register it in another state, the state of registration will often charge you tax on the difference. This can be true even if the car was purchased several years ago. They always assume you bought the car out of state to avoid paying tax in your home state. It is up to you to prove what taxes you paid to other states at the time of the original purchase, otherwise you pay the full going rate.

I've lived in several states and each one had a form or line to complete for interstate purchases when you do your yearly taxes. Needless to say, one way or another, states get their taxes.

FYI-CA has always been on the bleeding edge of trying to collect taxes and impose fees in ways not seen before!

Chris Padilla
04-15-2008, 7:40 PM
I regularly purchase cars in Oregon and then register them in California. DMV nails me for the sale's tax along with registration fees. However, I already expected this so it is no big deal but it's a painful check to write each time! :(

Jim Becker
04-15-2008, 7:51 PM
Chris, I thought you've been buying your cars in Bavaria... ;)

Chris Padilla
04-15-2008, 7:56 PM
Warum ja! :D

Rick Gifford
04-15-2008, 9:46 PM
I feel I am taxed to death already. If I can buy out of state and not pay state taxes that's great. If the states close the loopholes well that's the way it will be. I am 100% sure all the states will eventually do this. Its money they arent getting and that idea doesnt last forever.

They want to tax yard sales here also. So far the people have been successful in telling them where to go with the idea.

Tax when you buy, tax when you sell, tax when you keep it (think property taxes), tax when you save it, tax when you spend it, tax if its given away...

Eventually enough people will say enough and start VOTING these taxes down.

Until then plan to get taxed. Even retroactively.

And I'll do my best to avoid additional taxes the best I can without breaking the law. I won't feel the least bit bothered by it.

Doug Jones from Oregon
04-15-2008, 10:50 PM
Interesting discussion.

As more and more states recognize this as a viable method of gathering more tax dollars I think we will see the action increase.

It will be interesting to see what effect overall this has on mail order, internet, and catalog sales. Prior to shipping costs getting so high it was quite normal for one to look to out of state purchasing to avoid the sales tax.

I do know that anything I purchase from Amazon and have sent to my folks in WA state get sales tax added, no matter where it is sent from.. but, we all know that Amazon has a small office in WA.

"Al Dixon"
04-16-2008, 2:05 PM
Just my 2 cents worth. This may not apply to you or to residents of states other than PA for that matter...

If you buy a machine for use in your business for the manufacture of your end products, the sale is tax exempt (at least in PA). This little tidbit came from the PA state revenue office.

I called them and asked a few questions when I received a similar letter from a company from which I had purchased equipment.

-Al

Mike DeHart
04-16-2008, 8:00 PM
We just had a sales tax auditor in from california, and if you do woodworking professionally you can probably expect a visit soon. She said one of the followups is to audit those who did not pay use tax to them on out of state purchases when sales tax is not collected. Good luck.

Denny Rice
04-16-2008, 11:07 PM
I suppose the people who complain about sales tax don't drive on the roads, use any public or government services or otherwise benefit from any of it.

TANSTAFL (there ain't no such thing as a free lunch)

Comparing tax agencies / government to Nazi's or any other derogative group is really insulting the entire population of that particular area. Government has functions to remove portions the people don't like. If all your neighbors are good with it you are probably out of luck.

Don't like living in a republic, try communism or a dictatorship.

Joe


I have to chime in here. This is wrong in so many ways. We pay an income tax on our earnings then pay another tax every time we try to spend the income we were already taxed on the first time. As for the roads, highways, ect, that is what that tax at the gas pump pays for, remember the stuff we pay almost 4.00 a gallon for? (thats what elected officials keep telling me) I say its time we throw all the dirty bums out in washington and toss them in the harbor.

Ben Rafael
04-17-2008, 7:39 PM
Toss them in the harbor? How about toss them in the wood chipper.

jeremy levine
05-02-2008, 10:30 AM
Amazon sales tax law ......
http://www.news.com/8301-10784_3-9934188-7.html?part=rss&subj=news&tag=2547-1_3-0-5

Chris Padilla
05-02-2008, 12:18 PM
Ugh, this thread is TAXING! ;)

Eddie Watkins
05-02-2008, 2:26 PM
As I remember, federal law exempted sales tases from internet purchases if there was no place of business within the state where the pruchase occurred. I guess that has been repealed? I know it was set up as a e-business stimulus originally.

Joe Jensen
05-02-2008, 8:36 PM
Amazon sales tax law ......
http://www.news.com/8301-10784_3-9934188-7.html?part=rss&subj=news&tag=2547-1_3-0-5


Funny how the article says that Amazon will have to pay the tax, conveniently skipping that the tax will simply raise costs (taxes NY residents).

Brian Elfert
05-06-2008, 1:20 PM
I had a small business and got audited by the state of Minnesota for sales and use tax. I ended up owing $7,000 in taxes, but no penalties. The sales tax portion was fairly small so I just paid it and didn't try to collect it from customers. Some had probably already paid use tax, but oh well.

The auditor was a stereotypical tax auditor. I think she went to KGB school of tax auditing.

Tom Veatch
05-06-2008, 7:16 PM
As I remember, federal law exempted sales tases from internet purchases if there was no place of business within the state where the pruchase occurred. ....

From:

http://www.news.com/8301-10784_3-9934188-7.html?part=rss&subj=news&tag=2547-1_3-0-5


A 1992 U.S. Supreme Court decision in the Quill v. North Dakota case (http://supct.law.cornell.edu/supct/html/91-0194.ZO.html) currently limits states' ability to collect sales taxes from out-of-state retailers. It says retailers aren't required to collect sales taxes from customers who live in states where the businesses don't have a physical presence, or "nexus." New York's new statute represents one attempt at getting around those limitations.