Now that the Supreme court has paved the way for states to collect sales taxes, it will be interesting to see the details. Will it or will it not have an effect on the 'small" operation, and what defines small? In all probability it will affect most operations. Living at least 1 1/2 hours from a LHS, the net will still provide the best option for me, although not as good as before.
A lot will depend on how the states write their laws and whether Congress does anything.
The South Dakota law was only for businesses with $100,000 in sales in the state. That probably excuses most model railroad businesses, maybe all.
Paul
IRONROOSTER A lot will depend on how the states write their laws and whether Congress does anything. The South Dakota law was only for businesses with $100,000 in sales in the state. That probably excuses most model railroad businesses, maybe all. Paul
You forgot the “or 200 individual transactions in the state” part of the ruling.
The ruling:
https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf
Andre
Here in OH I pay a "useage tax" on my state income taxes each year for taxable purchases over the internet that do NOT include sales tax. I keep track of all my purchases in Excel so figuring that up is pretty straightforward.
So, if all internet purchases are going to be tacked with a state sales tax then that will be one less thing for me to tabulate for my yearly taxes. Most of the items that I purchase online are already taxed so it won't really affect or curtail my buying choices. For me it's pay now...or pay later.
Tom
https://tstage9.wixsite.com/nyc-modeling
Time...It marches on...without ever turning around to see if anyone is even keeping in step.
The real burden is now on the small business that must now be able to calculate the applicable tax on a sale anywhere in the US (for example the tax rate inside the city limits are different than the tax rate in the county). I would assume there are services that calculate that (buy stock in those companies). Then the small business will have to forward the taxes to each of the 50 states. A lot more paperwork.
Dave H. Painted side goes up. My website : wnbranch.com
tstage Here in OH I pay a "useage tax" on my state income taxes each year for taxable purchases over the internet that do NOT include sales tax. I keep track of all my purchases in Excel so figuring that up is pretty straightforward. So, if all internet purchases are going to be tacked with a state sales tax then that will be one less thing for me to tabulate for my yearly taxes. Most of the items that I purchase online are already taxed so it won't really affect or curtail my buying choices. For me it's pay now...or pay later. Tom
You mean you actually report to the state that which is not already reported to it by another entity? In the absence of an out of state seller reporting your purchase to the State of Ohio, how is the state going to even know that you bought anything? There would be no reason to report the sale unless the seller were simultaneously required to collect the tax itself.
Without checking every state with a sales tax, I’m pretty sure that every state with such a tax has the use tax verbiage. By the same token, I very seriously doubt that any of those states get much revenue in that way.
This thread has less to do with model railroading than it does with the prohibited topic of politics. Keep it on the topic of model railroading or it will be locked or deleted. Thanks.
--Steven Otte, Model Railroader senior associate editorsotte@kalmbach.com
andrechapelon tstage Here in OH I pay a "useage tax" on my state income taxes each year for taxable purchases over the internet that do NOT include sales tax. I keep track of all my purchases in Excel so figuring that up is pretty straightforward. So, if all internet purchases are going to be tacked with a state sales tax then that will be one less thing for me to tabulate for my yearly taxes. Most of the items that I purchase online are already taxed so it won't really affect or curtail my buying choices. For me it's pay now...or pay later. Tom You mean you actually report to the state that which is not already reported to it by another entity?
You mean you actually report to the state that which is not already reported to it by another entity?
Andre,
Yes, when filling out my yearly state income taxes, I report the total amount of no sales tax purchases that I made the previous year because...that's the law here in OH.
In the absence of an out of state seller reporting your purchase to the State of Ohio, how is the state going to even know that you bought anything?
They don't. Reporting your purchases is presently by the honor system. That could (and probably will) change in the future though.
Last year I bought a number of MRRing-related items over the internet off places like eBay. Only 10% of those were taxed by a state. So my useage tax was more than usual.
There would be no reason to report the sale unless the seller were simultaneously required to collect the tax itself. Without checking every state with a sales tax, I’m pretty sure that every state with such a tax has the use tax verbiage. By the same token, I very seriously doubt that any of those states get much revenue in that way. Andre
You may be right about that, Andre. Even so, it's the law here in OH to report all taxable purchases - in state or out-of-state - where NO sales tax was applied and I'm just abiding by that law. Any non-taxable no sales tax purchases (which varies from state-to-state) are free from any useage tax.
andrechapelon IRONROOSTER A lot will depend on how the states write their laws and whether Congress does anything. The South Dakota law was only for businesses with $100,000 in sales in the state. That probably excuses most model railroad businesses, maybe all. Paul You forgot the “or 200 individual transactions in the state” part of the ruling. The ruling: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf Andre
More a case of the news articles I read didn't mention the 200 sales part. That will catch more businesses.
Of course, I suppose a small operation could limit their sales each year to SD to stay under the $100,000/200 transaction limits.
tstage andrechapelon tstage Here in OH I pay a "useage tax" on my state income taxes each year for taxable purchases over the internet that do NOT include sales tax. I keep track of all my purchases in Excel so figuring that up is pretty straightforward. So, if all internet purchases are going to be tacked with a state sales tax then that will be one less thing for me to tabulate for my yearly taxes. Most of the items that I purchase online are already taxed so it won't really affect or curtail my buying choices. For me it's pay now...or pay later. Tom You mean you actually report to the state that which is not already reported to it by another entity? Andre, Yes, when filling out my yearly state income taxes, I report the total amount of no sales tax purchases that I made the previous year because...that's the law here in OH. In the absence of an out of state seller reporting your purchase to the State of Ohio, how is the state going to even know that you bought anything? They don't. Reporting your purchases is presently by the honor system. That could (and probably will) change in the future though. Last year I bought a number of MRRing-related items over the internet off places like eBay. Only 10% of those were taxed by a state. So my useage tax was more than usual. There would be no reason to report the sale unless the seller were simultaneously required to collect the tax itself. Without checking every state with a sales tax, I’m pretty sure that every state with such a tax has the use tax verbiage. By the same token, I very seriously doubt that any of those states get much revenue in that way. Andre You may be right about that, Andre. Even so, it's the law here in OH to report all taxable purchases - in state or out-of-state - where NO sales tax was applied and I'm just abiding by that law. Any non-taxable no sales tax purchases (which varies from state-to-state) are free from any useage tax. Tom
And I thought taxes were bad here in the Peoples Republic of Maryland.........guess I'm better off than I thought.
Beyond that, I will take the 5th.........
But actually Tom, as a point of Constitutional Law, the Constitution says "no State shall make legal tender for any debt, public or private, anything other than gold or silver coin".
Depending on how you read that, the ablity of the States to collect taxes at all, or pay their bills, using Federal Reserve Notes (valueless paper money), is subject to question....... :)
Truth is a great many "laws" are constructed by con men to make criminals out of honest people.
But now more seriously, this is just more "the hobby is too expensive" on the part of the OP. Local shops are dead, with or without internet sales taxes.
Centralized distribution is the retail model of the future - get use to it.......
Sheldon
As I see it, the only way to even the playing field for small on-line businesses and local brick-and-mortar businesses is have all businesses charge sales tax based on the buyer's residence. If Joe from California walks in to the hobby shop in Podunk Iowa, they collect 10% ( or is it 15% now that Cali is bankrupt?) and send it to Sacremento, instead of 3% and send it to Des Moines. Losing traveller's sales taxes like that might cause some states to reconsider this turn of events.
I suspect that the states will define small as any business that does more than 1$ per year of business.
Bear "It's all about having fun."
Steven Otte This thread has less to do with model railroading than it does with the prohibited topic of politics. Keep it on the topic of model railroading or it will be locked or deleted. Thanks.
But I will concede that the topic of the Internet Sales Tax may have an adverse effect on Internet sellers, especially the guy or gal selling out of his or her garage. And, in turn, that may have an adverse effect on the "little guys" which may mean less model railroading transactions on websites like eBay.
For me, I will let the politicians and the courts sort it all out. If the price is right, I will buy it, sales tax or not.
Rich
Alton Junction
It's almost impossible to discuss taxes of any kind without becoming somewhat political.
As a model railroad consumer, this may add to the cost of my hobby, but so what else is new? If I want or need a model railroad product, I will need to order it tax or no tax.
CofG&WRA FanIf Joe from California walks in to the hobby shop in Podunk Iowa, they collect 10% ( or is it 15% now that Cali is bankrupt?) and send it to Sacremento, instead of 3% and send it to Des Moines.
Welcome to the forum.
You may want to broaden and update your sources of news. California's economy is roaring, now the fifth largest in the world all by itself (recently passing the United Kingdom). The state has such a large budget surplus ($3.8B) that lawmakers are fighting over how to spend it.
The state has plenty of tough issues that come from growth in some sectors and not others, but being bankrupt is not one of them.
Thinly veiled political commentary is becoming more prevalent on this forum recently. I wish it would be moderated out – just as my comment should (and likely quickly will) be. I'm surprised that this comment from a new member was moderated and still allowed.
Byron
Layout Design GalleryLayout Design Special Interest Group
cuyamaThinly veiled political commentary is becoming more prevalent on this forum recently. I wish it would be moderated out – just as my comment should (and likely quickly will) be. I'm surprised that this comment from a new member was moderated and still allowed. Byron
Byron,I agree..This a modeling forum and topics should be about modeling..
Now on a prototype forum while discussing the history of railroads and some current events various Government actions will enter the discussion it can not be helped.
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
This will not effect my purchases of model railroad related items at all. Being a consumer, I am glad the burden of collecting these taxes is on the seller.
.
I still spend well over 50% of my model railroad money in real hobby shops in person.
-Kevin
Living the dream.
Actually Steve, this is about economics- not politics- and it directly impacts on Model Railroader magazine as well as the advertisers upon which it depends for revenue. If I buy an MR at Barnes and Noble in Florida ( because there are no more "newstands" and few LHS near me) I pay a sales tax. If I order a new subscription to MR from your Internet Web site, located in Wisconsin, based on this court decision, now I will be also paying a sales tax as well. Each of your advertisers has a Web site to generate sales, also now subject to sales tax from wherever the order originates. This court decision directly impacts this hobby in all aspects, inclusive of MR magazine and is an apt topic for discussion here same as "the death of the LHS" or "prices on EBay". I don't play by PC rules and have a right to opine on things which directly impact our hobby.
Cedarwoodron
Maybe you can avoid it by creatively shopping on different platforms? I don't know.
BTW, has anyone else noticed that bearman and IRONROOSTER have almost identical post quotes? I thought that was funny. Coincidence?
I'm beginning to realize that Windows 10 and sound decoders have a lot in common. There are so many things you have to change in order to get them to work the way you want.
cedarwoodron Actually Steve, this is about economics- not politics- and it directly impacts on Model Railroader magazine as well as the advertisers upon which it depends for revenue. If I buy an MR at Barnes and Noble in Florida ( because there are no more "newstands" and few LHS near me) I pay a sales tax. If I order a new subscription to MR from your Internet Web site, located in Wisconsin, based on this court decision, now I will be also paying a sales tax as well. Each of your advertisers has a Web site to generate sales, also now subject to sales tax from wherever the order originates. This court decision directly impacts this hobby in all aspects, inclusive of MR magazine and is an apt topic for discussion here same as "the death of the LHS" or "prices on EBay". I don't play by PC rules and have a right to opine on things which directly impact our hobby. Cedarwoodron
Actually, you may have right to opine about the economics of the hobby, but not necessarily on this forum.
As the "owner" of this forum, Kalmbach and MR can impose pretty much whatever rules suit them.
Discussions about the "price of the hobby" have and will be moderated as Kalmbach sees fit. As well they should be.
Yes, I make all sorts of snarky comments everytime the "cost" of the hobby comes up. It has never been an inexpensive hobby, and participation at a particluar economic level is not a "right".
Ideas for solutions to the cost of the hobby? Here are several:
Make more money
Settle for different modeling goals
I make my own personal decisions about how much I am willing to spend on this hobby. But I will not complain about prices, complain about sales taxes, complain about shipping charges, and so on, and so on. There are lots of things in this hobby I choose not to afford, like $2,500 brass locos, or even $700 locos, but I do not think those things are priced too high.........
As someone who once worked in this industry, I still feel all the discounting went a long way in destroying the local hobby shops.
You all can't have your cake and eat it too. Service (in the form of products waiting on the shelf) or lowest price? Take your pick?
So the new business model is products on the shelf in cental locations where distribution costs can be the lowest possible and products are ordered via the interweb and shipped to the customer.
If some 5% or 8% sales tax makes or breaks your ability to be in this hobby, you might want to reconsider if you can afford it in the first place?
My daddy taught me that there are things in this life that follow this rule:
"If you have to ask "how much", you can't afford it"
Things like:
Exotic cars
Swimming pools
Pleasure boats
Luxury travel
and yes, model trains.......
You are only "entitled" to what you earn, and what you defend. Everything else is gift from god or some other person.
Putting aside opinions on sales taxes and whether you can afford them, what I worry about are the increased overhead costs for small manufacturers. Depending on how states write (or have already written) their laws this could be a big headache and consume a lot of time to deal with it.
Sure companies will pop up with a service to handle this, but it will cost. For a big company, that gets spread out over many products/sales. But a small operation may have to raise prices so much they lose too many sales and go under. This is the real impact on the hobby - lost products.
Like many of us here, I have a finite amount to spend on this hobby. It's enough that I can enjoy the hobby. But my buying decisions are affected by price. I may love your boxcar kit, but if it costs too much I'll skip it in favor of other hobby things I want and buy a boxcar that maybe isn't as nice or unique, but costs less because it was mass produced by a bigger manfacturer.
Death and taxes are inevitable. I'll take the taxes.
Henry
COB Potomac & Northern
Shenandoah Valley
Oh yeah. This thread will be gone first thing Monday morning.
andrechapelon Oh yeah. This thread will be gone first thing Monday morning. Andre
As well it should be. You and I have explained the economics of the hobby business about 1000 times now, and we still get all this moaning about prices, be it the products, or the shipping, or now sales taxes.
Like I said earlier - want more trains?....make more money.
Don't cry about the manufaturers, or shipping companies, or the government.
IRONROOSTER Putting aside opinions on sales taxes and whether you can afford them, what I worry about are the increased overhead costs for small manufacturers. Depending on how states write (or have already written) their laws this could be a big headache and consume a lot of time to deal with it. Sure companies will pop up with a service to handle this, but it will cost. For a big company, that gets spread out over many products/sales. But a small operation may have to raise prices so much they lose too many sales and go under. This is the real impact on the hobby - lost products. Like many of us here, I have a finite amount to spend on this hobby. It's enough that I can enjoy the hobby. But my buying decisions are affected by price. I may love your boxcar kit, but if it costs too much I'll skip it in favor of other hobby things I want and buy a boxcar that maybe isn't as nice or unique, but costs less because it was mass produced by a bigger manfacturer. Paul
Well again, having some experiance in this business, I don't think this will put anyone out of business that was not already headed that way.
Small manufacturers? Big manufacturers? The only thing that defines that today in this hobby is how much production time you buy from some guy in China, usually the same hand full of guys in China.
Guess what? Companies have come and gone in this industry since its beginning and good products always seem to reappear with a new name on the box......
Examples:
TruScale = Train Miniture = Walthers (1980's)
Revell = AHM = CoCor (building kits)
Silver Streak = Walthers = Ye Olde Huff and Puff = LaBelle
Life Like/Proto = Walthers
etc, etc, etc, the list of buyouts, rebirths, revived tooling just in my life time is endless.
And the products that do/have disappeared are usually no longer of a type or quality desired by the current crop of modelers....
BigDaddy Death and taxes are inevitable. I'll take the taxes.
Agreed.... when you put it that way. What I seen on the news this morning doesn't look so bad now.
I look at it this way I never like paying shipping on what I'm buying. Now It will just feel like I'm paying shipping twice
ATLANTIC CENTRAL IRONROOSTER Putting aside opinions on sales taxes and whether you can afford them, what I worry about are the increased overhead costs for small manufacturers. Depending on how states write (or have already written) their laws this could be a big headache and consume a lot of time to deal with it. Sure companies will pop up with a service to handle this, but it will cost. For a big company, that gets spread out over many products/sales. But a small operation may have to raise prices so much they lose too many sales and go under. This is the real impact on the hobby - lost products. Like many of us here, I have a finite amount to spend on this hobby. It's enough that I can enjoy the hobby. But my buying decisions are affected by price. I may love your boxcar kit, but if it costs too much I'll skip it in favor of other hobby things I want and buy a boxcar that maybe isn't as nice or unique, but costs less because it was mass produced by a bigger manfacturer. Paul Well again, having some experiance in this business, I don't think this will put anyone out of business that was not already headed that way. Small manufacturers? Big manufacturers? The only thing that defines that today in this hobby is how much production time you buy from some guy in China, usually the same hand full of guys in China. Guess what? Companies have come and gone in this industry since its beginning and good products always seem to reappear with a new name on the box...... Examples: TruScale = Train Miniture = Walthers (1980's) Revell = AHM = CoCor (building kits) Silver Streak = Walthers = Ye Olde Huff and Puff = LaBelle Life Like/Proto = Walthers etc, etc, etc, the list of buyouts, rebirths, revived tooling just in my life time is endless. And the products that do/have disappeared are usually no longer of a type or quality desired by the current crop of modelers.... Sheldon
I don't really disagree with what you're saying. But when I talk about small manufacturers, I mean really small. Maybe it's being in S scale, but some of the manufacturers make their products in the U.S. in quantities less than 100 - they don't really have enough volume to interest the China firms. They mostly don't sell through hobby shops either or only a very few. Sure in the grand scheme of the hobby they are miniscule, but they make things in S that aren't otherwise available. And if they go under, no one else is likely to make it in S scale.
Track fiddler BigDaddy Death and taxes are inevitable. I'll take the taxes. Agreed.... when you put it that way. What I seen on the news this morning doesn't look so bad now. I look at it this way I never like paying shipping on what I'm buying. Now It will just feel like I'm paying shipping twice
My point exactly. You don't like paying shipping, but you like those low internet discount prices. How do you think the shipping got paid when you bought stuff at a local hobby shop?
The higher prices at the local shop paid the shipping.........and the sales taxes got collected and paid........
Nobody selling trains is getting rich, on the net, or in a retail store. Have you ever managed a retail business? Do you have any idea what the profit margins/markups are?
Trust me, many of those low internet prices represent pretty small profit margins for these types of products. They would go broke if they shipped for free.
CofG&WRA Fan As I see it, the only way to even the playing field for small on-line businesses and local brick-and-mortar businesses is have all businesses charge sales tax based on the buyer's residence. If Joe from California walks in to the hobby shop in Podunk Iowa, they collect 10% ( or is it 15% now that Cali is bankrupt?) and send it to Sacremento, instead of 3% and send it to Des Moines. Losing traveller's sales taxes like that might cause some states to reconsider this turn of events.
There is one fundimental flaw in that thinking. Requiring me to reveal my identity or place of residence, to make a cash purchase, is a non starter legally.
You know, cash, that funny paper with pictures of old dead guys......
ATLANTIC CENTRAL andrechapelon Oh yeah. This thread will be gone first thing Monday morning. Andre As well it should be. You and I have explained the economics of the hobby business about 1000 times now, and we still get all this moaning about prices, be it the products, or the shipping, or now sales taxes. Like I said earlier - want more trains?....make more money. Don't cry about the manufaturers, or shipping companies, or the government. Sheldon
Well, since this thing will be removed anyway....
I’m a legal resident of California who happens to be in Maine currently. Were I to buy something from Maine Modelworks in Yarmouth and take it back to CA, I would technically owe the CA State Board Of Equalization the difference between the ME sales tax and the CA sales tax on the purchase. In this instance, the state would never find out and even if it did, pursuing collection for such a small amount would be idiotic.
Six years ago, we bought a new car in ME and drove it back to CA. I won’t go into the rationale behind the decision as it’s irrelevant. However, we knew going in that we would be required to register the car within 20 business days of our return and that also meant we’d end up paying the difference in sales tax. In this case, there would have been some serious penalties if we’d tried to play fast and loose and keep the car registered in Maine. If the CHP pulls you over and you hand them a CA license from a car carrying ME plates, you got some ‘splaining to do, Lucy. It’s easy to hide model trains. Vehicles requiring registration, not so much. Besides, who buys $30K in trains in one order??
All that’s really happened with the latest court ruling is that the law is finally catching up with the technology. It was a good run while it lasted and it’s time to suck it up and move on.
Now if those of us with Amazon Prime could start getting our trains free of shipping charges.......