[Blue_Lum33]

I am sure a Mod will be asking what the heck does this have to do with watches or Lumtec.
Well everybody that loves and orders Lumtecs is about to be effected by new Legislation proposed to tax all internet purchases from states that have state sales taxs.

Chris I hope you have contacted your local Senator and Congressman to express your disapproval.

Online Sales Tax Bill Passes Senate

And in some instances there could be double taxation when the product goes to another country with a national sales tax.
To me this is not good, because pretend I am a Lumtec customer in Oregon which has no sales tax, now I order from Lumtec and I have to pay.
It is possible when a potential buyer is on the line of deciding to pull the trigger on a Lumtec, they now decide no because of this.

If this passes does Lumtec have any plans to counter-act this negativity, even though it's totally not their fault ?

I guess if business is seriously effected you could always move to a state with no sales tax.

Edit: I forgot to add if gross sales are under 1 million, a company is exempt from this, not sure if Lumtec is under or over this amount.

 

[Scott D]

This would only affect customers in states where they already are required to pay sales tax, and they'd be taxed at their home-state rate, not at the retailer selling them the items location. The retailed does not collect tax based on their local state rate but instead on the request of the state the customers are in. So in your example since Oregon does not collect sales tax, an online retailer still would not collect tax from Oregon customers. If the customer is in California though (for example) the retailer would collect the sales tax and forward the payment to California (somehow). Customers in the other 4 states without sales tax (Alaska, Delaware, Montana New Hampshire in addition to Oregon) would be unaffected as well. the effect on the retail is a different story and could be a burden, especially if they host their own checkout systems I'd imagine.

This is still a far way from done, but I believe eventually some type of change will occur mandating sales tax collection.


BTW, while I do not completely agree with this change, this is a direct result of government 'forced policing' when we as a whole fail to properly police ourselves and move further and further into 'non-compliance'. Remember, this is not a 'new tax' in most cases, it's enforcement of paying a tax already due, but never paid by the customer.

 

[Blue_Lum33]

Perhaps then this will not be as bad for Lumtec as I originally thought, if what you say is how it will go, then I won't have to worry about paying state sales tax.
Still for a customer that walks into Lumtecs showroom what rate of sales tax do they pay ?

 

[Amun]

The current (and Dec, 2012) total local sales tax rate in Mentor, OH (Ohio) is 6.750%

 

[Scott D]

Perhaps then this will not be as bad for Lumtec as I originally thought, if what you say is how it will go, then I won't have to worry about paying state sales tax.

I'm sure it'll go thru 50 different versions before it's signed & done, but in the end I don't see any way states without sales tax will be affected. If they don't charge sales tax in a B&M store, I highly doubt they'd look to collect sales tax from online sales. The whole point of this is to 'reset' everyone into paying the sales tax they should have been paying all along but never did voluntarily.

 

[pocketwatch50]

I wouldn't worry. It still has to pass the house and that isn't all that certain.

When you pass a law and you don't/ can't enforce it and folks ignore it you just wasted your time passing it. Most would see this as a tax increase.

 

[Blue_Lum33]

I wouldn't worry. It still has to pass the house and that isn't all that certain.

When you pass a law and you don't/ can't enforce it and folks ignore it you just wasted your time passing it. Most would see this as a tax increase.

Somebody made the comment that with the 1 million dollar exemption, who will be checking that part out the IRS ?
Obviously with big national companies, it's not an issue. But some smaller players in the watch industry like Lumtec could fluctuate depending on the success of model years.
Some of the strap makers too, however I doubt they would be selling over 1 million a year, if they are that is a pretty good business.

One year you could be over the next year under, but you don't know until the end of the year, so how do you know if you need to charge sales tax, if you are doing between let's say 850,000-1.1 million over a period of the last five years on average.

 

[Scott D]

One year you could be over the next year under, but you don't know until the end of the year, so how do you know if you need to charge sales tax, if you are doing between let's say 850,000-1.1 million over a period of the last five years on average.

I'd imagine it would be based on a number of past years sales average, or maybe just last years sales. No idea, but I'm sure it wouldn't be on this years sales as you'd never know exactly where you'd be until late in the year.

 

[sgrenald]

Somebody made the comment that with the 1 million dollar exemption, who will be checking that part out the IRS ?
Obviously with big national companies, it's not an issue. But some smaller players in the watch industry like Lumtec could fluctuate depending on the success of model years.
Some of the strap makers too, however I doubt they would be selling over 1 million a year, if they are that is a pretty good business.

One year you could be over the next year under, but you don't know until the end of the year, so how do you know if you need to charge sales tax, if you are doing between let's say 850,000-1.1 million over a period of the last five years on average.

There's probably exemptions for small businesses with, say, less than 5 employees. You can bet that any business that makes under $1.1 million is going to find a whole lot of business expenses to drop their number below that point. But Blue Lume33 is probably right in that they'll take the average of the last few years. Most companies that are close to the magic number would be smart to start collecting anyway. Either roll it into the price, or just collect and submit it.

 

[clubbtraxx]

In many Western European countries we have 19%-21% sales tax, so I wouldn't complain too hard on that side of the big pond.