A Poll: Diamonds and sales tax

[diamondseeker2006]

If you bought a diamond or diamond ring online from another state, did you voluntarily pay tax to your state even if it was not reported to them by the vendor (or do you plan to if you are buying a diamond this year)? It seems that many people prefer to buy out-of-state to avoid the tax, yet others say they would report it voluntarily.

 

[Dee*Jay]

Oooooooh, I just hate these questions. My husband orders a lot of stuff off the internet and we have this conversation all the time (in an academic sense, not whether to really do it or not!).

But back to your topic; I not only bought my diamond in my home state, but I had it shipped to my friend in a neighboring state and then had her drive the package back in the height of rush hour traffic on Christmas eve to avoid the sales tax! (Yes, I KNOW it was wrong. I will probably burn in hell for this, but I got an extra fraction of a carat for the $$$ that I saved, so it was all worth it in my mind!)

P.S. - If the state taxing authorities are somehow monitoring this board, I''m just kidding. Ha Ha! Hope you''re laughing with me!

 

[MissAva]

I did for my pendent though it took me a while to find out who to pay and how. With the second stone for my e-ring, I called and asked if I had to pay sales tax and if so on the price I paid or the price it was listed for…they never got back to me. I paid sales tax for the spinel, but forgot to for the pendent….I need to do that before I move next week.

 

[MissGotRocks]

I bought my stone in the state that I live in so had no choice. I had talked to a friend in another state who really didn''t want it mailed to her although it would have saved me mucho $$. I also had to pay sales tax on the WHOLE amount - even though I traded in a stone that I had bought from them previously and paid sales tax on it. I called the State Treasury Office and they told me that that was correct - sales tax was due on the entire amount - not just the difference in trade. Anything bought out of state should have sales tax paid on it too - they offered to send a form!

 

[Dee*Jay]

Yeesh, Miss GR, that seem just crazy to make you pay tax on the whole amount rather than just the difference in the transaction since you had already paid tax on the original stone at the time it was purchased. Those tax people will get you commin'' and goin''!

 

[MissGotRocks]

Oh, I know. The jeweler told me I had to pay it on the whole amount and I about flipped! That''s why I called the state and that was what I was told. Once you really start climbing in price the sales tax will take your breath away!

 

[diamondlil]

Date: 5/6/2006 6:20:49 PM
Author: MissGotRocks

I had talked to a friend in another state who really didn''t want it mailed to her although it would have saved me mucho $$.

What a friend.

 

[diamondlil]

Date: 5/6/2006 11:23:15 AM
Author: Dee*Jay


P.S. - If the state taxing authorities are somehow monitoring this board, I''m just kidding. Ha Ha! Hope you''re laughing with me!

I literally laughing out loud, DJ!!!!!

I purchased my diamond and its setting from out-of-state vendors. I''ll say no more.

 

[diamondseeker2006]

Date: 5/6/2006 7:52:32 PM
Author: DiamondLil

Date: 5/6/2006 11:23:15 AM
Author: Dee*Jay


P.S. - If the state taxing authorities are somehow monitoring this board, I''m just kidding. Ha Ha! Hope you''re laughing with me!

I literally laughing out loud, DJ!!!!!

I purchased my diamond and its setting from out-of-state vendors. I''ll say no more.

This is why I made it a poll. I figured we''d get more replies if people could respond anonomously!

Incidentally, I made this poll because someone had asked on this forum if a certain designer charged sales tax to out-of-state cutomers, and someone replied that they HAD to report the purchase and pay the tax regardless. I replied that this may be technically true, but I am thinking not many yard sale proceeds get reported nor do most ebay sales by individuals. This falls into that territory....as long as vendors are not required to report sales to the states outside their own, many people will choose to not voluntarily contribute over and above their normal obligation to their state.

But like Lil, I''ll keep my answer a secret, too!

 

[MissGotRocks]

Date: 5/6/2006 7:49:38 PM
Author: DiamondLil

Date: 5/6/2006 6:20:49 PM
Author: MissGotRocks

I had talked to a friend in another state who really didn''t want it mailed to her although it would have saved me mucho $$.

What a friend.

Yeah, she was scared to death that she would somehow get in trouble. I accepted her answer as I didn''t want to push someone into something they were uncomfortable with but her reaction seemed a little over the top to me. We would have driven to her house (7 hours away) to pick it up. She didn''t have to open it or anything. Oh, well, I just paid the tax so if the tax collectors are reading this, I paid the tax!

 

[mrssalvo]

MGR, next time you can have it shipped to me, I''d be happy to receive it for you

 

[diamondseeker2006]

Date: 5/6/2006 10:33:48 PM
Author: mrssalvo
MGR, next time you can have it shipped to me, I''d be happy to receive it for you

 

[WinkHPD]

Date: 5/6/2006 6:55:00 PM
Author: MissGotRocks
Oh, I know. The jeweler told me I had to pay it on the whole amount and I about flipped! That''s why I called the state and that was what I was told. Once you really start climbing in price the sales tax will take your breath away!

What state do you live in? In Idaho you only pay on the difference.

Wink

 

[MissGotRocks]

Date: 5/6/2006 10:33:48 PM
Author: mrssalvo
MGR, next time you can have it shipped to me, I''d be happy to receive it for you

You''re a doll - thanks!

 

[kenny]

So far 41 of you, or 91%, have admitted you broke the law and comitted sales tax evasion.

We think we are anonymous here.
But isn't it possible for your identity to be determined by computer experts (who may be working for the government with legal authority to subpoena records form Yahoo and AOL etc.)?
If so, do you really want to go on record confessing to a crime?

States know they are loosing zillions in sales tax revenue due to Internet sales.
This amount is growing exponentially evey year.
I expect at some point they are going to do something about it.

Diamonds are high value and considered luxury items by much of the public.
Polititians hate to impose taxes on voters, but love to impose tax on cigarettes, alcohol or luxury items like private yatchs.
From a PR sense Internet diamond sales tax evaders might be seen at a nice juicy target for a test case wth little public backlash.
Do you really want to be part of the first legal case?

Perhaps I'm just paranoid but if I owned this board I'd delete this thread before the 42nd person incriminates her/himself.

 

[DiamondExpert]

Kenny - I think you might be correct, and it wouldn''t take a computer expert to do it, only a subpoena!

 

[diamondseeker2006]

It is certainly fine for the whole thread to be deleted if there is any danger to anyone. It came about because people were giving advice on this subject on another thread.

I'd like to ask those who are adamant about voluntarily paying the tax if they have ever gone 56 mph or even 60 in a 55 zone? That is breaking the law, too. Did you turn yourself in to the police and volunteer to pay the fine for breaking the law? In my mind, it is exacty the same. So just be sure you are consistent in your thinking.

 

[kenny]

The poll is a great idea.
I love reading poll results and this is a hot topic.

Again, maybe I'm just paranoid but I just typed the beginning of your original question into Google and a pricescope thread on the topic came up on page 5.
If I was working for the goverment and planning a strategy to reverse this trend of lost tax revenue Pricescope would get my attention.

 

[diamondseeker2006]

To the moderators...I wouldn''t want there to be any problems for anyone because of this thread. I apologize if anyone is concerned about it. So please delete it if you think best. I really enjoy PS and trust your judgement if it is best to omit this topic.

 

[kenny]

And I too apologize if I am just overthinking this.
Of course I respect whatever the moderators decide.

 

[AndyRosse]

Date: 5/6/2006 8:04:11 PM
Author: diamondseeker2006

Incidentally, I made this poll because someone had asked on this forum if a certain designer charged sales tax to out-of-state cutomers, and someone replied that they HAD to report the purchase and pay the tax regardless. I replied that this may be technically true, but I am thinking not many yard sale proceeds get reported nor do most ebay sales by individuals. This falls into that territory....as long as vendors are not required to report sales to the states outside their own, many people will choose to not voluntarily contribute over and above their normal obligation to their state.

I was the other person in the other thread you mentioned that said you HAD to report your purchases. I was only repeating the law, and I don''t appreciate being mocked for merely telling you the law. I don''t even understand your comment to be honest. I told you the law and you replied that it is true. Agreed. What you do with that information is your business. I think there are plenty of threads on here about this discussion, and it constantly perplexes me why these topics are dredged up over and over again. Bottom line is that you are SUPPOSED to report the purchase, what you do with the law is YOUR OWN BUSINESS.

 

[kenny]

I think we have established that over 90% don't pay this tax.

You can argue that this is wrong, or that it is a very minor crime so it doesn't matter or not a crime at all.
The fact remains over 90% of poll responders say they break this law and clearly must not care.
So far they seem to have gotten away with it, but they *have* left an electronic record.

Go onto a college campus today and you will discover that the *majority* of students not only illegally download music they think the law is a joke.

We are living in interesting times.

 

[perry]

I don''t see Leonid or Irena deleting this poll: There have been many threads on this subject before - just never a poll.

The state tax boards are not going to chase this board either.

You are right that the states are loozing billions - and they are very aware of it.

So here is what''s comming. The current exemption for compananies to not have to collect sales tax on internet sales is time limited. It will not be renewed (it was only extended last time becuase the small internet vendors could claim that the system was so confusing that it would be too much of a burden to figure out how much to collect and who to pay).

The states have been working hard to standardize definitions on what is taxible and what is not (most states have already agreed to the standards) - and are setting up clearing houses to collect the sales taxes. They have also been testin it. It will be no more difficult for a business than processing a credit card (a small business would purchase a service from a clearing house - who would provide the software and collect all the money from the business and distribute it to the states and communities. The clearing house will get a smalll % that will be paid for by the state: example: if the state sales tax is 5% - the state will get paid 4.95% and the clearing house keeps 0.05% - or whatever the number is).

Some of you may have noticed that certain intenet compaines do in fact charge you sales taxes already; they are the ones who are testing the systems.

I know that the states would like to have this implemented before this winter yet. More likely Januay 1, or April 1 of next year.

No onto penalties:

I know of one state that has already done the computer runs on who is reporting and paying internet sales taxes and who is not has developing and tested the following statagy:

It goes like this: When you are selected for a routine audit, they note if you have or have not reported "out of state" sales taxes. If not, they run your credit report, and contact your bank. They then contact the credit card companies who show up on your credit report and request a copy of your records and may request your bank records. Most people do not understand that the banks and credit card companies own those records and can show them to anyone they please - without telling you at all. With your credit card and bank records in hand they identify how much stuff you likely purchased via the internet.

As the opening of your "tax review" they point these out and ask you why you did not pay sales tax on these items. Then they announce that they have you on fraud - even before they look at the rest of your income tax return; and now it is a fraud investigation with a whole other levels of penalties and fees - and they are now able to audit your other tax years (not to mention that you are probably wise to hire the best tax lawer you can find - NOW - to minimize - if possible - the results of the fraud investigation; and since they have you on fraud - they can freeze your bank accounts if they have any concerns about getting their money).

The state that ran this "experiment" reported an amazing amount of income from back taxes and fines compared to the normal audit where some of the people only "made a mistake." and only the governor - for now - is stopping them from applying the same policy to all. However, they pull it out the instant they see other problems during an audit.

The auditors also report great personal satisfaction as well.

It has been suggested that the state could recover substaintial moneys just by threatening such an audit - and send out generic bills to all taxpayers and allow an "amnesty" program up front. I actaully think that will get some traction in several states next year if the internet tax exclusion is not closed soon.

Hmmm.... how much did you save in sales tax..... is it worth it if the state catches you in an audit. Do you have any idea how much the fines are for tax fraud, applied for each and every year (going back 7 years); not to mention the tax due + interest and normal penalties...

I have always paid my sales taxes.

As far as a speeding ticket: A speeding ticket is cheap in comparision; not that I''ve ever had one (I have had a few warnings though...)

Perry

 

[mrssalvo]

I asked hubby about this because I am paranoid by nature and like to follow all the rules. this is what he said

Tax advice from accountants.

Stock advice from investors.

 

[diamondseeker2006]

Date: 5/7/2006 2:30:39 PM
Author: Rascal49

Date: 5/6/2006 8:04:11 PM
Author: diamondseeker2006

Incidentally, I made this poll because someone had asked on this forum if a certain designer charged sales tax to out-of-state cutomers, and someone replied that they HAD to report the purchase and pay the tax regardless. I replied that this may be technically true, but I am thinking not many yard sale proceeds get reported nor do most ebay sales by individuals. This falls into that territory....as long as vendors are not required to report sales to the states outside their own, many people will choose to not voluntarily contribute over and above their normal obligation to their state.

I was the other person in the other thread you mentioned that said you HAD to report your purchases. I was only repeating the law, and I don''t appreciate being mocked for merely telling you the law. I don''t even understand your comment to be honest. I told you the law and you replied that it is true. Agreed. What you do with that information is your business. I think there are plenty of threads on here about this discussion, and it constantly perplexes me why these topics are dredged up over and over again. Bottom line is that you are SUPPOSED to report the purchase, what you do with the law is YOUR OWN BUSINESS.

Michelle,

I am totally unable to see where anyone has been mocked (to treat with ridicule or contempt)??? I simply stated how the topic came up and restated what the replies were. If I misrepresented what anyone said including you, I am very sorry. However, I see no way any of my statements be construed as as mocking, ridiculing, or contemptuous. I told how the topic came up, and then asked how others felt about it by doing a poll as I thought more people might reply that way. I personally have never bought a diamond or anything greater than a book out of state as far as I can recall. I happen to follow my states method of paying a certain percentage of income for out-of-state sales tax. Some of us are newer than others on here and when we see the fact that buying out of state results in a possible sales tax advantage, I think it is normal for that topic to come up. I personally do not know the law of all 50 states. I imagine there may be some differences. I was just curious how other people felt about the subject. That''s all there was to it...certainly not a thing to do with you personally.

 

[diamondseeker2006]

Date: 5/7/2006 3:34:09 PM
Author: perry
I
As far as a speeding ticket: A speeding ticket is cheap in comparision; not that I''ve ever had one (I have had a few warnings though...)

Perry

Perry, thanks for all the information. I figured it is just a matter of time before taxes will be deducted for everything! For the record, I have not ever had a speeding ticket either (I''m not sure it is cheap once the insurance goes up, though!). It would be unintentional if I did.

I think maybe I''ll just cancel the diamond. Then I won''t have to worry about what to do on this issue.

 

[perry]

I have not ever had a speeding ticket either (I''m not sure it is cheap once the insurance goes up, though!). It would be unintentional if I did.

Well, I am fortunate that according to my insurance agent a "one time" speeding ticket for someone like me will not change my rates (multi-decade clean record).


Concerning your diamond: Chances are that you will be getting a better deal through the internet and paying the state your sales taxes than buying locally. So don''t necessarily cancle the diamond.

Another alternative: Check out NiceIce.com and talk to Todd. He is in Oregon a state with no sales taxes.

I can''t speak for all states; but in my home state (Wisconsin) and in most states the common exclusion to sales taxes on out of state purchases is if you actually buy it and take delivery of it in another state - and pay that state''s sales taxes.

For most diamonds - the "no Oregon sales taxes" would buy a nice weekend to week long getaway to a beutiful part of the country (escpecially in the summer).

So, spend the same amount of money and get a nice trip tossed in as well. Besides, Todd is one of those great guys out there.

I do note that there are some states (NY comes to mind) that probably want you to pay them the difference between the local and home state tax on out of state purchases. Check your local state statues.

Perry

 

[cinnabar]

Date: 5/7/2006 5:18:31 PM
Author: perry
Another alternative: Check out NiceIce.com and talk to Todd. He is in Oregon a state with no sales taxes.

I can''t speak for all states; but in my home state (Wisconsin) and in most states the common exclusion to sales taxes on out of state purchases is if you actually buy it and take delivery of it in another state - and pay that state''s sales taxes.

For most diamonds - the ''no Oregon sales taxes'' would buy a nice weekend to week long getaway to a beutiful part of the country (escpecially in the summer).

So, spend the same amount of money and get a nice trip tossed in as well. Besides, Todd is one of those great guys out there.

I do note that there are some states (NY comes to mind) that probably want you to pay them the difference between the local and home state tax on out of state purchases. Check your local state statues.

I know for a fact that Washington, which is a neighbouring state to Oregon, has a law requiring its residents to pay tax on goods bought from Oregon.

I remember from a previous thread on this topic that there had been a clampdown in some southern state, where people were driving to a neighbouring sales-tax-free state and buying large expensive items like furniture; the furniture stores were required to give the names and address of the buyers and there was a "sting" for the unpaid taxes.

Like Perry says though, some states are pickier than others; it would appear that a state which imposes sales tax is not very keen on its residents popping "next door" for large purchases, whereas one with no tax-free neighbours isn''t so rigorous. It''s a case by case scenario, depending on where the buyer lives and where he/she is buying from.