Amazon.com

[Oh Shoot]

Buy local!

Hell, Amazon is cheaper than even Wally on some stuff. So local, my ass.

I have simple policy on TN sales tax: don't ask, don't tell.

Since TN Dept of Revenue hasn't asked me, I don't tell them.

I did recently file three years of amended income tax returns with the state though, to recoup some taxes I shouldn't have paid if I had had decent tax prep. Let's see how Dept. of Revenue is about coughing up what they owe ME first.

- OS

Edited April 26, 2012 by OhShoot

[KJ48]

Hell, Amazon is cheaper than even Wally on some stuff. So local, my ass.

I have simple policy on TN sales tax: don't ask, don't tell.

Since TN Dept of Revenue hasn't asked me, I don't tell them.

I did recently file three years of amended income tax returns with the state though, to recoup some taxes I shouldn't have paid if I had had decent tax prep. Let's see how Dept. of Revenue is about coughing up what they owe ME first.

- OS

I agree, even if you pay the 10% most online places are cheaper. One thing I will say for Amazon is very good at taking returns, absolutely zero hassles and quick refunds. I dont really see how charging the tax is going to help local stores, still saves me gas money and time ordering online and I usually can find what I want as opposed to the deer in the headlights look I get from most retail salesmen. The tax helps helps the state if anything. A lot of places I order from online collect TN sales tax, wonder how much of that actually makes it back to the state.

According to this article 3041 people voluntarily paid the personal use tax statewide last year, that means there are a lot of tax cheats out there, I'm sure a slightly higher amount of the 6.2 million people in TN have ordered things tax free on the internet.lol.

http://www.knoxnews.com/news/2012/apr/25/amazon-sends-tax-notices-to-tennesseans/

OTOH, I dont like the 'brick and morter' stores using the use tax as an issue to get more customers in the door, the big retailers are the ones lobbying for pushing the use tax. Forcing the state to penalize people for shopping online isnt going to help anyone, UPS and Fedex is doing very well because of it, and for some saving that 10% is the difference between buying and not buying. Any money pumped into the US economy is a good thing right now. I'm pretty sure the day the TN dept of revenue can get a hold of all internet purchases and starts mailing out notices people will rise up and try to get the law changed.

As far as the state the county clerk overcharged me 200.00 on a recent car purchase, they typed in a wrong number in the trade in line and I didnt notice it since they dont give you a detailed receipt. The state sent me a check back in a week when they found the error.,I would have never known. So maybe some hope for you..

[Troutburger]

It wouldn't surprise me if Amazon just closes shop and moves out of TN.

[KJ48]

It wouldn't surprise me if Amazon just closes shop and moves out of TN.

Wont happen, they cut a deal with TN so they dont have to collect the tax for two years. They just have to tell you how much you spent and provide a link to where to pay. Its no different then it was last year, only difference is a lot of people (including myself) had no idea that you had to pay full sales tax on all out of state purchases.

I would guess in the next few years the feds will get involved and not only will there be the use tax in TN but there will be a VAT tax as well.

[Guest Lester Weevils]

So if a person buys lots of kindle books from Amazon, the person most likely owes tax on the book downloads just like ordering a boombox, powertool or hard drive?

[strickj]

Buy local!

Ordering from Amazon is buying local

[KJ48]

So if a person buys lots of kindle books from Amazon, the person most likely owes tax on the book downloads just like ordering a boombox, powertool or hard drive?

If you didnt get charged sales tax from Amazon then you owe the state, same with downloaded software, music and movies from whatever source from what I see.

I wonder if they tax magazine subscriptions (both paper and e-magazines) as well..

[KJ48]

Ordering from Amazon is buying local

Last book I ordered from Amazon was shipped from Nashville, so I guess it is.

[hkgonra]

I agree with what you posted btw, I just don't like how amazon is doing it. It is like you get a statement at the end of the year. BTW you owe your state this much money. That was not the terms of check out.

I am just saying if taxes are due, the retailer should collect them. I can not leave wal mart with out paying by tax and ask them to send me a notice at the end of the year.

I disagree, we would all be better off if we had to write a check at the end of the year for not only our sales tax but our income tax.

[Just2Honor]

DaddyO, look at it this way, the state gets to use their definition of "retroactive", not Websters because it's their law. Back in the late 60's I worked for a textile machinery firm in SC. Company got a letter from the TN Dept of Revenue that they should have been collecting sales and use tax and making paymenrts to the state for 7 years. Pay up or lose your business in the state and get sued by the state. Several of us spent a couple of weeks going through invoices adding up the shipments to TN so the boss could send a check. Within two years NC, AL, MS, and Ga had hit him up for past sales and use tax. Had to statrt addign it to the cost and remitting to the states. Only difference is some web companies don't have to charge you but you are still responsible to TN for the tax. Don't like it either but its the rule we live by in TN.

BTW, we habve an income tax. It's even called an "income tax"--The Hall Income Tax. It is on the income you make from certain investments.

[Oh Shoot]

So if a person buys lots of kindle books from Amazon, the person most likely owes tax on the book downloads just like ordering a boombox, powertool or hard drive?

I'd say so, if the book is actually stored on the device.

Reason I mention it that way, was that back when I did biz, if I uploaded a web site to out of state server, I didn't have to charge customer sales tax on the labor, since "taking possession and primary use" of the product was not in-state. But if I gave them a copy on CD, then was required to pay sales tax.

- OS

[Chucktshoes]

I disagree, we would all be better off if we had to write a check at the end of the year for not only our sales tax but our income tax.

x2. If everyone had to cut a check to the .gov for their taxes, folks would hold them accountable for what they spend our money on. Tax withholding is the taxpayers' enemy.

[Guest Lester Weevils]

I'd say so, if the book is actually stored on the device.

Reason I mention it that way, was that back when I did biz, if I uploaded a web site to out of state server, I didn't have to charge customer sales tax on the labor, since "taking possession and primary use" of the product was not in-state. But if I gave them a copy on CD, then was required to pay sales tax.

- OS

Thanks OS

Hadn't thought about it for awhile. Never knew the rules in detail and have forgotten what little I knew. The rules about who has to collect sales tax seemed inconsistent back when I needed to do that sometimes, but maybe it makes sense if one studied it enough.

Years ago was asking the musicians union know-it-alls why musicians don't have to charge sales tax for playing gigs, and they said you just don't have to, and have no reason to doubt em. I could tune somebody's piano and didn't have to charge sales tax. Or repair an amplifier or synthesizer and not have to charge tax. But if I put any parts in there I had to charge em tax, if I didn't pay tax on the parts. If I paid tax on the parts then just passed on the cost, unless I was marking up the parts. I usually figured the parts cost enough that I'd just pass it on, though some people like to make a profit on em. Pay five bucks for a power transistor and charge twenty. Could record somebody and not have to charge tax, but as you say charge tax on any "physical media" delivered.

Don't think doctors or lawyers have to charge sales tax. But some things "seem like a service" but still have to charge sales tax. It seems contradictory in some cases. Electric power board, gas company, phone company or cable company-- They have to pass on some taxes but I don't recall seeing sales tax on the bills. Maybe its in there. But you pay sales tax on a software CD at Staples or a printed book or magazine, and you pay sales tax on gasoline or batteries or solar panels. So some energy you pay sales tax and some energy you don't? Some data you pay sales tax and some data you don't?

There may be some "fundamental principle" and the tax law or custom is pure logic based on the fundamental principle. Nobody told me what that principle might be. Would be interesting to know.

[1gewehr]

The sales tax is the only fair tax there is. You get to control exactly how much tax you pay. Don't want to pay any more tax? Don't buy the item or find a source other than retail.

I don't send my elected representatives to the Legislature to spend my money. I send them there to figure out ways to spend less of my money and make the residents of Tennessee more free. And Linda Elam and Mae Beavers are aware of that. For the most part, they do a decent job of it. If your reps are not doing that, you need to make yourself known to them. If they still don't listen, make your neighbors known the them as well. And if they still won't listen, get new representatives.

[KJ48]

Thanks OS

Hadn't thought about it for awhile. Never knew the rules in detail and have forgotten what little I knew. The rules about who has to collect sales tax seemed inconsistent back when I needed to do that sometimes, but maybe it makes sense if one studied it enough.

Years ago was asking the musicians union know-it-alls why musicians don't have to charge sales tax for playing gigs, and they said you just don't have to, and have no reason to doubt em. I could tune somebody's piano and didn't have to charge sales tax. Or repair an amplifier or synthesizer and not have to charge tax. But if I put any parts in there I had to charge em tax, if I didn't pay tax on the parts. If I paid tax on the parts then just passed on the cost, unless I was marking up the parts. I usually figured the parts cost enough that I'd just pass it on, though some people like to make a profit on em. Pay five bucks for a power transistor and charge twenty. Could record somebody and not have to charge tax, but as you say charge tax on any "physical media" delivered.

Don't think doctors or lawyers have to charge sales tax. But some things "seem like a service" but still have to charge sales tax. It seems contradictory in some cases. Electric power board, gas company, phone company or cable company-- They have to pass on some taxes but I don't recall seeing sales tax on the bills. Maybe its in there. But you pay sales tax on a software CD at Staples or a printed book or magazine, and you pay sales tax on gasoline or batteries or solar panels. So some energy you pay sales tax and some energy you don't? Some data you pay sales tax and some data you don't?

There may be some "fundamental principle" and the tax law or custom is pure logic based on the fundamental principle. Nobody told me what that principle might be. Would be interesting to know.

Its pretty confusing for sure. I did computer consulting in Illinois and it was not taxable, and was going to start a small business here to do the same thing and according to the research I did at the time (2004 or so) if I touched a piece of hardware or installed software other than I created (considered personal property) I should charge tax on the labor. If all I did was direct someone then no tax, I would assume thats why doctors, lawyers etc arent taxed. Labor on real property (permanent structure) is not taxed though.

I never did start the business but I remember it because Illinois at the time there no tax on labor at all and I was surprised they charged it here.

Edited April 28, 2012 by KJ48

[Guest Lester Weevils]

The sales tax is the only fair tax there is. You get to control exactly how much tax you pay. Don't want to pay any more tax? Don't buy the item or find a source other than retail.

Hi 1gewehr

Maybe there isn't any perfect tax but I don't naturally object to sales tax. Surely some tax designs are worse than others, but dunno if there is a perfect design that is "ideal".

I agree gov should spend as little as possible and collect as little tax as is necessary for the smallest necessary gov. People's different senses of "fairness" are almost unavoidably influenced by the concept that "the system which taxes ME the LEAST is the most fair". So if a feller doesn't make much money then a progressive income tax seems the most fair. If a feller makes high income then a flat income tax (if not a regressive income tax) seems "most fair" because it minimizes his tax bill. If a feller doesn't own much property then a property tax seems most fair. If a feller owns lots of property then a property tax is the very essence of "unfairness". If a feller is not a spend-a-holic and he already owns most of what he would ever desire in physical comforts, then a traditional retail sales tax might seem most fair, because the feller doesn't expect to buy much more stuff at retail. I've got mine so screw everybody else.

Now there are some rather evil plans from big-gov progressives for NEW ADDITIONAL taxes which are across-the-board transaction taxes. In light of those evil plans for ADDITIONAL TAX, my suggestion may sound supportive of wrong-headed people. But given an objective to eliminate all previous taxes and replace it with a single tax, while also following a principle to avoid static wealth-taxes (property tax, personalty tax, or other gov assessments of previous-acquired wealth)-- It might be "as fair as its gonna get" to levy a small-percentage tax on ALL TRANSACTIONS?

Current sales taxes only apply to a small percentage of all transactions. Traditional sales tax doesn't tap the entire economy and therefore if we eliminate all taxes except tradtional sales tax as the sole gov revenue source-- The sales tax rate will be huge. Like the TN sales tax rate or worse The fella who wants to spend $50,000 in a year to pay skilled workmen to remodel his house, would think that a sales tax which exempts labor services would be super-fair (because the fella doesn't have to pay any tax on his $50,000). A fella who likes to buy lots of stocks and bonds might be real happy with a "fair" sales tax which exempts stocks and bonds, because the fella doesn't have to pay any tax on his stock and bonds.

PERHAPS a sales tax broadened to include all cases where money changes hands-- A transaction tax-- MAY be about as fair as its gonna get? The only way to avoid transaction tax is to avoid transactions. Which MAY tend to supress economic activity. On the other hand, such a broadened-base tax would have a very low rate. Except for privileged individuals in such independent position to never indulge in economic activity-- The "sting" of the tax would be equal regardless of what a person would spend his money on! Because the "tax sting" would be at the same rate regardless of what you spend yer money on, then the tax would not tempt people to do stupid unproductive things with their money merely to to avoid tax. This might be a strong motivation for people to make "the wisest decisions they can make" on each transaction, rather than making unproductive decisions merely to minimize the tax bill.

Speculative rates-- Which would be more "fair"-- Pay 11 percent state and possibly 20 percent federal sales tax on only a few classes of transactions, or pay maybe 1 percent on each and every transaction? Maybe that idea has faults. Merely throwing out the idea. It might be "as fair as its gonna get". If the idea has any merit, the main problem is that people have pre-conceived ideas of the "fairness". A feller who spends a big percentage of his income on bonds, would be pissed paying 1 percent transaction tax on bonds because "it wasn't done before and it will cost me more than I used to pay and therefore it ain't fair".

Its pretty confusing for sure. I did computer consulting in Illinois and it was not taxable, and was going to start a small business here to do the same thing and according to the research I did at the time (2004 or so) if I touched a piece of hardware or installed software other than I created (considered personal property) I should charge tax on the labor. If all I did was direct someone then no tax, I would assume thats why doctors, lawyers etc arent taxed. Labor on real property (permanent structure) is not taxed though.

I never did start the business but I remember it because Illinois at the time there no tax on labor at all and I was surprised they charged it here.

Thanks KJ48. Good points.

I've done "out of state" programming consulting for 17 years, so maybe the TN laws of what you have to charge sales tax on, have changed, Perhaps today it is true that you would have to charge sales tax on labor charges, of a computer consulting service delivering in-state service. Am pretty certain that was not the case many years ago, but it may have changed nowadays. Alternately, people may have so misunderstood the TN law that they gave you the wrong advice. When I did local services and had to live in fear of the TN salest tax people, I'd call them and ask questions. But it is so complicated maybe every time you ask the question on "odd cases" maybe you would get different advice from the gov employees?

[KJ48]

Thanks KJ48. Good points.

I've done "out of state" programming consulting for 17 years, so maybe the TN laws of what you have to charge sales tax on, have changed, Perhaps today it is true that you would have to charge sales tax on labor charges, of a computer consulting service delivering in-state service. Am pretty certain that was not the case many years ago, but it may have changed nowadays. Alternately, people may have so misunderstood the TN law that they gave you the wrong advice. When I did local services and had to live in fear of the TN salest tax people, I'd call them and ask questions. But it is so complicated maybe every time you ask the question on "odd cases" maybe you would get different advice from the gov employees?

True on the government employee, three different people, three different answers. Thats pretty universal no matter what state you are in.

This is from the TDOR website, pretty close to what I was told (I think):

Are computer consulting services subject to sales/use tax?

In many instances, yes. Consulting services alone are not taxable. However, such services are frequently sold in conjunction with the transfer of software and taxable services. Software is currently taxed as tangible personal property (Tenn. Code Ann. Section 67-6-102(30)(). The "sales price" of software and other tangible personal property includes the total amount for which it is sold, including any services that are a part of the sale (Tenn. Code Ann. Section 67-6-102(26)). Thus, any charges for services that are performed as part of the sale of software are subject to tax. For example, in Creasy Systems Consultants, Inc. v. Olsen, 716 S.W.2d 35 (Tenn. 1986), the Tennessee Supreme Court held that hourly consulting charges for determining the needs of a client, designing a software program to meet those needs, and then writing the software program were all subject to sales tax. Thus, if consulting services are not provided as additional services separate and optional from the sale of software or taxable services, they are subject to tax in Tennessee.

It even appears I was told wrong or heard it wrong that if I wrote the software I didnt charge sales tax but I guess not.

All I can say is its great to just get a paycheck and let the other guy worry about it sometimes

[Guest Lester Weevils]

True on the government employee, three different people, three different answers. Thats pretty universal no matter what state you are in.

This is from the TDOR website, pretty close to what I was told (I think):

Are computer consulting services subject to sales/use tax?

In many instances, yes. Consulting services alone are not taxable. However, such services are frequently sold in conjunction with the transfer of software and taxable services. Software is currently taxed as tangible personal property (Tenn. Code Ann. Section 67-6-102(30)( ). The "sales price" of software and other tangible personal property includes the total amount for which it is sold, including any services that are a part of the sale (Tenn. Code Ann. Section 67-6-102(26)). Thus, any charges for services that are performed as part of the sale of software are subject to tax. For example, in Creasy Systems Consultants, Inc. v. Olsen, 716 S.W.2d 35 (Tenn. 1986), the Tennessee Supreme Court held that hourly consulting charges for determining the needs of a client, designing a software program to meet those needs, and then writing the software program were all subject to sales tax. Thus, if consulting services are not provided as additional services separate and optional from the sale of software or taxable services, they are subject to tax in Tennessee.

It even appears I was told wrong or heard it wrong that if I wrote the software I didnt charge sales tax but I guess not.

All I can say is its great to just get a paycheck and let the other guy worry about it sometimes

Thanks for the good info, KJ48. Didn't know it had changed.

Yep it is certainly less complicated to work for somebody else and let them figure out the nasty details. On the other hand collecting sales tax is "merely" yet another annoyance and cost of doing biz. Assuming that the extra tax added to the invoices doesn't scare off biz and starve the company, the tax doesn't impact your small biz profit directly, as long as you are pricing the service high enough to pull a profit. Of course it is quite possible that the extra tax could scare off biz, and it does take time to prepare tax statements and write checks, time which could otherwise be used to make money. Or alternately the extra expense of paying an accountant or bookkeeper to do the nasty and boring details.

Just saying, charging sales tax isn't necessarily a disincentive to having a small biz, unless the extra annoyance happens to be "the straw that broke the camel's back".

I'm not bright or nerdy enough to keep up with open source software. Some folks make pretty good money supporting open source free software because the stuff tends to be insanely complicated full of maddening obscure bugs and limitations. Its nice to get something "free" if you are smart enough to make it function in appropriate fashion.

To satisfy idle curiosity it would be an interesting question whether an open-source software consultant would have to charge sales tax for his services. If the consultant tells the client, "download this list of files and then I will configure and modify them so that they actually work and perform useful functions." The way your quoted paragraph is written, possibly the consultant would still be required to charge sales tax? Or not? Bureaucrats would most likely decide the question in a fashion which optimizes the gov's income stream.

That paragraph seems to imply that if the consultant downloads the free software himself and then installs/configures/modifies it, then he would have to charge tax even if the software is "free". Weird and confusing.

[KJ48]

Thanks for the good info, KJ48. Didn't know it had changed.

Yep it is certainly less complicated to work for somebody else and let them figure out the nasty details. On the other hand collecting sales tax is "merely" yet another annoyance and cost of doing biz. Assuming that the extra tax added to the invoices doesn't scare off biz and starve the company, the tax doesn't impact your small biz profit directly, as long as you are pricing the service high enough to pull a profit. Of course it is quite possible that the extra tax could scare off biz, and it does take time to prepare tax statements and write checks, time which could otherwise be used to make money. Or alternately the extra expense of paying an accountant or bookkeeper to do the nasty and boring details.

Just saying, charging sales tax isn't necessarily a disincentive to having a small biz, unless the extra annoyance happens to be "the straw that broke the camel's back".

I'm not bright or nerdy enough to keep up with open source software. Some folks make pretty good money supporting open source free software because the stuff tends to be insanely complicated full of maddening obscure bugs and limitations. Its nice to get something "free" if you are smart enough to make it function in appropriate fashion.

To satisfy idle curiosity it would be an interesting question whether an open-source software consultant would have to charge sales tax for his services. If the consultant tells the client, "download this list of files and then I will configure and modify them so that they actually work and perform useful functions." The way your quoted paragraph is written, possibly the consultant would still be required to charge sales tax? Or not? Bureaucrats would most likely decide the question in a fashion which optimizes the gov's income stream.

That paragraph seems to imply that if the consultant downloads the free software himself and then installs/configures/modifies it, then he would have to charge tax even if the software is "free". Weird and confusing.

From what I gather reading that if you do anything more that tell someone what to do, like a lawyer, your labor is taxed. In Illinois there simply was no tax on labor, auto repair, consulting (including hardware installs/upgrades) etc but there is also a state income tax there. My guess is the labor unions had a say in the no-labor tax thing, all parts were taxed of course.

The last line says even if you write the software yourself you must charge tax, I would guess it doesnt matter if it started out as open source and you changed one line of code or wrote the whole thing yourself - you create and you charge tax. How many people do charge who knows, probably the same 3000 out of 6 million that pay the use tax

I agree if you have enoigh margin then paying the tax even if you didnt charge it on the invoice shouldnt put you out of business, but it may take some explaining on a bid because a LOT of people say there should be no tax on labor.

Since I have lived here I have never had work done a car, the way I read it labor should be charged tax. I did have a lot of work done on my house from the hail storm last year and looking at the invoice it appears the general contractor charged tax on both materials and labor. Not sure if thats right or not but the insurance company paid the tax so who knows.

Edited April 29, 2012 by KJ48