[Elecraft] Price promo on K3 at Dayton?

[David Y.]

Hi All,

It may seem a tad late to respond to this email, but after Dayton I had 
several hundred emails to sort my way through.

As a former practicing CPA, I can, perhaps, give a little perspective on the 
sales tax issue.  First of all, it is not "bogus" for you to be charged 
sales tax for the state where you are physically present in at the time you 
consumate a transaction, assuming you take immediately delivery.  That's the 
law, and it's the law nationwide.  So, a California dealer, selling 
temporarily in Ohio, must charge Ohio tax on sales made, in person, in Ohio.

The reason we don't pay sales tax on many phone or internet orders is that 
such sales are technically "interstate commerce".  If you are not resident 
in the state where the sale is being actually made via telephone or internet 
(or mail), and if it is being shipped to you in another state, no sales tax 
should typically apply.  That is based on a long standing Supreme Court 
decision.  However, if you purchase from a dealer in another state, and that 
dealer also has operations in your state, you must pay the state tax for 
your state.  That's why I can't order from HRO tax free, even by phone, 
since they have a store in Phoenix.  AES, on the other hand, has no 
operations in Arizona, so I can buy from them tax free.  I can go personally 
to the HRO store in Portland, Oregon, however, and buy tax free from them, 
but that's because I'm physically in Oregon, so no interstate commerce is 
involved.  Oregon, by the way, doesn't have a sales tax, otherwise I would 
have to pay an Oregon sales tax.  But I can't call the Portland store and 
order something to be shipped to Arizona without paying Arizona's tax, 
because HRO has a store in Arizona.

Sales tax laws, although seemingly similar from state to state, are not.  In 
some states the tax is imposed on the seller (but they are generally allowed 
to pass it on as a "surcharge" to the buyer), while in other states the tax 
is technically imposed on the buyer, and collected by the seller.  But that 
is only a technical distinction, and doesn't really affect the end result to 
the consumer.  However, you can't blame Elecraft, or Hendricks, or any other 
seller at Dayton for charging you Ohio tax on a sale, since they risk not 
only being assessed the tax by Ohio, even if they don't collect it from you, 
but they also risk large penalties for failing to charge tax!  Some states 
are much more aggressive about monitoring special events like hamfests, 
etc., and I strongly suspect something as big as Dayton does get attention 
from the Ohio sales tax people.  So, although you may not like being charged 
the tax, you can't reasonably expect the dealer to accept the risk of 
possibly having to pay it for you!  If you don't want to pay it, see if the 
dealer will handle it like a phone order and ship it to your address.  That 
probably avoids the sales tax, but introduces shipping cost.  I say 
"probably" because some states may have invoked rules saying that if the 
sale is consumated in person, in their state, they are still entitled to the 
tax, even if it is shipped out of state.  I'm not sure that stands up under 
the Supreme Court ruling, but it has a point.  Very few states are more 
aggressive about sales tax enforcement than California, by the way.  Bigger 
states put more money into enforcement, so Ohio may also be a tough state.

Something you may not be aware of is that, even if you do order something 
from out of state, and avoid the sales tax, you still may be liable for it 
in your own state.  That's because almost all state laws are actually two 
taxes--a "sales" tax, and a "use" tax.  If the sales tax doesn't apply for 
some reason (like when it is sold to a dealer for resale, or no tax is paid 
because the buyer produces an exemption certificate), there is still a "use" 
tax (typically equal to what the sales tax would have been) if you use or 
consume the product in that particular state.  This is typically applied to 
businesses, but it technically applies to everyone.  So, if you live in 
California, for example, and buy something by mail from Ohio (paying no 
sales tax), California can technically assess you a use tax since you "use 
or consume" the product in that state.  Fortunately, this is rarely 
applied/enforced to individuals mainly because it is so hard to apply that 
rule and enforce it.

I know that's more than you ever wanted to know about sales tax, but the 
point is that you shouldn't get upset with a dealer like Elecraft who 
charges you sales tax (unless they charge it improperly).  It's too big a 
risk for that dealer to do otherwise.  Unfortunately, sales tax laws are 
very complex, and if we understood them better, we wouldn't be so inclined 
to get upset (with the dealer) about paying it.  In effect, you are 
"shooting the messenger" if you get upset with the dealer.  Your argument is 
really with the state!

Dave W7AQK




----- Original Message ----- 
From: "Matt Palmer" <kd8dao at gmail.com>
To: "David Wilburn" <dave.wilburn at verizon.net>
Cc: "Elecraft Discussion List" <elecraft at mailman.qth.net>
Sent: Saturday, May 16, 2009 6:48 AM
Subject: Re: [Elecraft] Price promo on K3 at Dayton?


> charging state tax, totally bogus IMHO, Hendricks was doing the same
> thing, must be a california thing.
>
>
> Matt
> W8ESE
> Former KD8DAO
> http://blog.MattIsKichigai.com
>