Ticking off my local dealer

[Holzhacker]

I buy from the same dealer in Chicago. It's the only Festool dealer we have. They are nice guys and girl. If they have it or I can afford to wait for it to come in, they get the business. Sure our 10.25-11.75 tax blows but it is unfortunately part of our local economy. On major purchases it is a significant amount of money. If I were buying a Kapex or some other $1000 + order. I would seriously think about calling Bob. Buying consumables or another sander, who cares. It's the cost of doing business. The ability to walk in the store, check out the tool, shoot the sh-t and hang out for a bit is worth it to me.

 

[dustpup]

It's not quite as simple as the "honor" system.

What you have is states who are unconstitutionally attempting to tax interstate commerce. Just because they tell me something doesn't make it lawful. For example, why do you think states are NOT enforcing that? It's because they know they don't have a leg to stand on.

The issue of the constitutionality of use taxes has been decided by the United States Supreme Court (Henneford v. Silas Mason Co., which was decided in 1937.) The general rule is that the tax is constitutional provided it is nondiscriminatory and "compensating" and designed to equalize taxes on both locally sold and imported goods. In Henneford, Washington imposed a 2 percent use tax on the use of personal property in the state, but reduced the tax by any sales tax paid to Washington or any other state.  This is the approach followed by most states today' If you purchase something online or in another state, you owe the difference between the tax paid and the tax imposed locally.

As for whether states are moving to enforce the law, the only impediment is the costs of enforcing the law. I know for a fact that the states have been trying to years to come up with a plan (I used to be a sales/use tax subject matter expert for the largest legal tax reporting drive in the US.  and I've read hundreds of reports on what the states are doing). Currently, as another poster noted, they are adding lines to state tax returns asking if you've purchased out of state products. By checking no, you are committing tax fraud (hey ... it worked for Al Capone!).

Sorry to get off topic about all this, but I always find it amusing that people actually think that out of state purchases are tax free.  The odds of getting caught are slim, but at some point the states will get what they are due!

 

[atogrf1]

Boy, THAT went off in a direction I didn't see coming.
I was leaning toward selling more tools an invigorating the dealers while giving consumers incentives to buy.

Yes, the place is on the North Side of the city.  They are GREAT people over there and the guys and the girl are the MAIN reason I buy there even when I work in a lumberyard for living (but we don't do exotic hardwoods), but I do some serious saving to purchase my tools.  I can't just afford them whenever I want them, so that extra $40-$75 for the tax (for me) is a huge deal.  And our tax rate went DOWN to 9.75% the other day!!!!
The hardwoods I buy are expensive enough to be sure.  I would rather spend that money on Wenge or Bubinga or something.

As for the tax and legal issues.  I'm not even gonna GET into that conversation.
I don't know enough about it to make an educated argument anyway.
However, I do appreciate all of your inputs.

 

[Brice Burrell]

...As for the tax and legal issues.  I'm not even gonna GET into that conversation.
I don't know enough about it to make an educated argument anyway.
However, I do appreciate all of your inputs.

Atogrf1, I agree, and besides, this is the best place to discuss cheating on one's taxes.

BTW, great avatar.

 

[atogrf1]

Thanks Brice.

Besides, I'm Italian.  We get audited every 2 years as a standard operating procedure ANYWAY.  LOL.
;D

 

[Wim]

As an European, I was amazed when I did my first (non-Festool) purchases in the USA. In PA, I had to add 6% sales tax to the price on the shelve. In Europe we have VAT (called BTW in Holland) but for consumers it is included in the price on the shelve. If you are a retailer, you may find prices with and/or without VAT on the tag.
To me there is nothing more simple than to show the inclusive price on the tag, because you have to pay it anyway at the counter. But I'm afraid that something from the times of George Washington will prevent this.  ;D
But like some other posters, I misuse the system and ordered out of state some big green/black chunks from Uncle Bob. The smaller additions came from the local Woodcraft because I like to support local shops also. Their expertise still amazes me, you will find this in Holland only when you are very lucky.

 

[atogrf1]

In my OWN defense here, LOL, I DO purchase my accessories from previously mentioned local shop.  (Systainers, Dominos, Sandpaper, Blades, etc...)
My post was in regards to the tools themselves.  Not the accessories.

[big grin]

 

[Joe Jensen]

I've read repeatedly that when tax rates are increased actual tax reciepts fall.  I know when Reagan cut tax rate rates, total $$ collected when up.  Anyone know if the is true beyond the Reagan example?

Here is funny but related story.  We had a live-out-nanny years ago.  The gal we hired insisted that we pay the nanny taxes as that was hot topic back then.  Getting set up to do that was amazingly hard.  I had to have Federal and State Employer ID numbers, had to pay unemployment and workers comp insurance too.  It was very confusing so I went to the state office for some help.  As I was chatting with the lady who was helping me I asked how long she had worked there, 14 years was her answer.  Then I asked if she was the only one who set up for nanny taxes and she was.  Then I asked how many other people she had helped over the past 14 years and she said I was the only one.  I was the only one she knew of who was going to pay nanny taxes at all.  Boy did I feel like a sucker.  The taxes and insurance costs ended up nearly double, FICA, Medicare, Workers Comp, and Unemployment Insurance. 

 

[Jim Becker]

For any of you who have a local or state sales tax there is a much more major issue.

When you file your taxes, the state tax form (here for certain) asks the question;

Did you purchase any items from the internet or out of state?

If you answered "no" to the question and the answer was truthfully "yes", you have just falsified/lied on a legal document.

When you sign the document either by pen or electronically, it states;

"Under the penalty of perjury the answers are true and correct"

By your answers you have now committed perjury and fraud. If you're audited and make a mistake it is one thing, if you committed fraud it is another. Getting away with the tax is one thing, getting prosecuted for fraud is another. All it takes is the luck of the draw to be audited.  

I know this because I run my purchases through my business, and was audited. I have always been very carefully about this. So I had no problem.

Think about all the prosecutions today that are not for the crime but for making false statements under oath.

That is how they just convicted a former police officer in Chicago. They could not prosecute for the crime, but they got him for making 2 false statements on a document from the year 2000.

atogrf1

Is the lumber yard near the Lincoln Park neighborhood?

You think all my suppliers are going to like getting 1099's from me. All the large box stores will be inundated.

Sorry to be the bearer of such news, passing along my experience.

Tom

I was also going to mention this...in most situations, "no sales tax" on online purchases is just a perception when in fact, most of us technically still owe the tax directly. Very few folks actually claim it. Hence, the increased push for forcing Internet retailers to collect it across state lines since the revenue hit to states (obviously this is a US issue) is substantial and growing. None of us "like" taxes, but we also don't like the idea of losing critical public services...it's a balancing act and said balance is getting further away from the center of gravity.

 

[Neill]

First of all, on behalf of the brick & mortar guys, I think that in many, but not all cases, they wind up being showrooms for the on line retailers.  We go to our local guy, do some touch and feel, ask some questions, etc. and then go to our computers and order from the guys on line.  In cases where we might want some accessories or supplies, we are out of luck because they generally don't carry that much.

Secondly, I have bought from the on line guys and they are great.  I also enjoy the experience of going into my local guy and walking out with a great tool.  There is always some conversation, some kidding and hoopla that goes on.  I also get a chance to inspect the tool and try it before I take it home.  So there is never a hassle about returns, not that I ever have.

The third issue, and it is probably getting more important as internet sales increase, is a national sales tax, or VAT (value added tax)  as they have elsewhere in many countries.  It would be added to all applicable purchases and appropriated back to the states based on some formula or actual source of the purchase and purchaser.  Yes it would create a bureaucracy but there is one already in place anyway./

Sales tax avoidance has always been a fact of life in the US because of the autonomous way this tax is handled.  When I lived in New Jersey they had no sales tax on clothing.  Where do you think New Yorkers who lived close to the border shopped?  New Yorkers could also buy in New York and have it shipped to a relative or friend in New Jersey and avoid the sales tax.

Neill

 

[honeydoman]

I prefer to buy tools either from local dealer or from tool shows.  this way you can see the tool, test it and buy it right then.  then if there is a problem you can take it back there and get another one, without the hassel of sending it back etc.

which has happened in the past a few times.

however accessories I will buy on line usually because they have them ready to send out, as dealers do not carry certain things.

I use the forums, internet etc for tool reviews to make sure it works good and does what it says it will do etc.  once reasearch is done off to get it!  then I review it!

The online dealers I have used in the past have always had great service including Bob Morino, Amazon.com, Mcfeelys, Fastcap and several others.  with me it is never the tax issue just spur of the moment buying,  I want it and I want it now.!!!  AFTER ALL I AM A TOOLAHOLIC!

 

[Rob-GB]

Trying not to  [dead horse],
I try to buy local but it often comes down to two things.

Stockholding.

Customer Service.

With a side salad of product knowledge.

I want my supplier to want my business, have the stock so I can get it very soon, and be able to inform me of aspects I have not found through my research.

My latest purchase, another thread, ticked all the boxes. ;D They just happen to not be local. Let the suppliers raise the bar of service, and may the better one win.
Rob.

 

[harry_]

I am just happy to live in New Hampshire!

No sales tax
No income tax
and I don't own land, so I don't pay property tax (it's built into my rent, I am sure).
I don't mind paying the fee on the few toll roads that we have, because they actually repair them!

...... and then there is the view!

State motto: Live Free or Die!

 

[WarnerConstCo.]

I am just happy to live in New Hampshire!

No sales tax
No income tax
and I don't own land, so I don't pay property tax (it's built into my rent, I am sure).
I don't mind paying the fee on the few toll roads that we have, because they actually repair them!

...... and then there is the view!

State motto: Live Free or Die!

That no sales or income tax sounds great!!

Two questions: 

How is the construction market?

Is it real humid there?

 

[harry_]

I am just happy to live in New Hampshire!

No sales tax
No income tax
and I don't own land, so I don't pay property tax (it's built into my rent, I am sure).
I don't mind paying the fee on the few toll roads that we have, because they actually repair them!

...... and then there is the view!

State motto: Live Free or Die!

That no sales or income tax sounds great!!

Two questions:   

How is the construction market?

lean,..... VERY lean.
[/quote]

Is it real humid there?
[/quote]

yeah, we had regular humid at the beginning of the week, We have since moved on to stupid humid.
(un)fortunately I have no work this week, so I can sit in AC all day. (my silver lining)

 

[jmbfestool]

Trying not to  [dead horse],
I try to buy local but it often comes down to two things.

Stockholding.

Customer Service.

With a side salad of product knowledge.

I want my supplier to want my business, have the stock so I can get it very soon, and be able to inform me of aspects I have not found through my research.

My latest purchase, another thread, ticked all the boxes. ;D They just happen to not be local. Let the suppliers raise the bar of service, and may the better one win.
Rob.

Same HERE!  I use a Dealer I went to for a Demo day my first Festool buy!(TS55)  Its just under 2 hours drive  I got a local dealer 10 mins away much bigger than the dealer I use now but I rather use the one further away because of the things you mentioned above Rob. 

My local dealer doesn't tell me about the latest things just sells me what he has got in stock so doesn't mean its the best or latest.

My mate went in to get a price on the TS55 because he loved mine! Any way he got a price well the Dealer I use all the time now had another Demo day for the Carvex and Ug-Stand and I wanted to try both and I ofcorse bought both! Any way my mate came with me and he asked for the price for the TS55 and he said it comes with a free Blade and two free Clamps. He was like thats good well the Dealer said its a festool offer Ill knocked off so much of the Guide rail and Bag if you buy it now so ofcrose my mate bought it. Now my local dealer was in the wrong because he should of bin selling the same offer because it was festool deal. Knowing my Local dealer he properly would of giving discount on the blade and clamps even thought should of been free. 

My Local dealer has loads 1000pounds on me and properly a lot more people. I have recommend 4 of my mates to my regular dealer they have bought quite a bit of him so they lost out on them aswell! Its because the way he is. His loss!!!!!

 

[WarnerConstCo.]

I am just happy to live in New Hampshire!

No sales tax
No income tax
and I don't own land, so I don't pay property tax (it's built into my rent, I am sure).
I don't mind paying the fee on the few toll roads that we have, because they actually repair them!

...... and then there is the view!

State motto: Live Free or Die!

That no sales or income tax sounds great!!

Two questions:   

How is the construction market?

lean,..... VERY lean.

Is it real humid there?
[/quote]

yeah, we had regular humid at the beginning of the week, We have since moved on to stupid humid.
(un)fortunately I have no work this week, so I can sit in AC all day. (my silver lining)
[/quote]

Well, the heat is the kicker.
I guess you don't have to make room for me, the 2 girls, the old lady and the dog then.

 

[Joe Jensen]

I hate to be the one to burst your bubble, but technically I do not think that you save money by ordering online. People often buy online (or drive to states with lower tax rates) in the mistaken belief that they can avoid sales tax. However, the law in all 50 states provides that if there is a difference between the tax you pay and the tax rate where you reside and use the equipment, you owe that difference to your state tax department. The term "sales tax" is actually incorrect; most jurisdictions call it a sales and use tax.

The law does to require online retailers to collect sales tax (unless you reside in the same tax jurisdiction as the retailer; but this does not absolve you from paying tax on those purchases. At some point the states may start cracking down on those purchases, but currently we operate on the honor system. 

Yup, totally acknowledge this.  Given that nearly everyone has bought something online where sales tax was not collected, I'm assuming you have as well.  Are you tracking EVERY purchase online and out of state and remitting the balance to your state?  What about hotels and restaurants and such?  Sounds like legally anyone who misses even a single transaction has committed a crime when they file their taxes.  I travel to Oregon a lot for work amd they have no sales tax.  When I travel and I buy a cup of coffee am I supposed to keep track of that and pay a sales "aka use tax" to my state when I'm not even using the product in my state?  What about when I buy a bottle of water in a vending machine in Oregon.  I don't even get an record of the transaction from the machine.  Am I supposed to carry a note pad and pen to track this spending too?  States need to get real.  Maybe they need to charge a "use" tax on cash to make sure they collect on every dollar spent, and then they can just have us remit every receipt where we paid sales tax to get a refund.  But then of course they would find a way to limit that too.

 

[harry_]

Those that live near the southern border of New Hampshire have a little saying:

Deval Patrick (Governor of Massachusetts) is the BEST governor NH has ever had!

You see, Massachusetts (aka: Taxachusetts) has a history of ridiculous taxation. Since the downturn in the economy, it has only gotten worse, ande our border stores LOVE it! also love it along the Main and Vermont borders too, just not enough people near those borders for it to really matter.

 

[leakyroof]

It's too bad the OP hasn't updated his post after all these months. Wood World, most likely the Festool/hardwood dealer in Chicago that he hinted at, is EXPANDING their Festool displays and collection because business has picked up. Also, while I don't know the partticulars on the new tax laws that came out, the people down in Springfield tried addressing this very issue with some new law they passed on getting sales tax to stay in the state AND collected. So maybe they were reading his post too>>> [blink] [blink]
Anyway, I support Wood World fully in spite of all the taxes, as I want and need a store nearby where I can sort out my questions on tools with them in my hands while a knowledgable person stands next to me answering my questions. With these guys, I get both. I HAVE done limited business with on-line Festool retailers, and it's been great as well.  [smile]