Strings by Mail and Michigan Use Tax

Choice of classical guitar strings and technical issues connected with their use.
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bacsidoan
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Strings by Mail and Michigan Use Tax

Post by bacsidoan » Fri May 06, 2016 12:23 am

Does any body know if SBM starts to collect Michigan Use Tax from all internet shoppers regardless of their state residencies?

riffmeister
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Re: Strings by Mail and Michigan Use Tax

Post by riffmeister » Fri May 06, 2016 12:03 pm

I just placed an order and paid MI state sales tax.

soltirefa
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Re: Strings by Mail and Michigan Use Tax

Post by soltirefa » Fri May 06, 2016 1:25 pm

riffmeister wrote:I just placed an order and paid MI state sales tax.
Wow, that sucks. In California now when you file your income tax you're supposed to volunteer any out-of-state purchases you made during the year so they can tax you for it. I have been volunteering my Strings by Mail purchases just to avoid any penalties if I were audited. So now I need to pay tax in both Michigan and California?

riffmeister
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Re: Strings by Mail and Michigan Use Tax

Post by riffmeister » Fri May 06, 2016 1:48 pm

soltirefa wrote:
riffmeister wrote:I just placed an order and paid MI state sales tax.
Wow, that sucks. In California now when you file your income tax you're supposed to volunteer any out-of-state purchases you made during the year so they can tax you for it. I have been volunteering my Strings by Mail purchases just to avoid any penalties if I were audited. So now I need to pay tax in both Michigan and California?
Yeah, me too. I'm too honest.

Not 100% sure, but I assume if one pays out-of-state sales tax then in-state sales tax need not be collected. That said, common sense assumptions about taxes are rarely correct!

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Michael Lazar
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Re: Strings by Mail and Michigan Use Tax

Post by Michael Lazar » Fri May 06, 2016 2:20 pm

If they are, it would seem they should not be. The definition of the tax I found is:

"Use tax of 6 percent must be paid on the total price (including shipping and handling charges) of all taxable items brought into Michigan or purchases by mail from out-of-state retailers. It applies to purchases made in foreign countries as well as other states."

[mod edit: no politics on this forum please]

Sorry for the rant. They slip out now and then.

soltirefa
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Re: Strings by Mail and Michigan Use Tax

Post by soltirefa » Fri May 06, 2016 2:49 pm

Fortunately I have bought so many strings from them already I have a lifetime supply. The only problem is that I discover a different brand/tension that I like better than the ones I already have. Plus, it's fun to buy stuff and await the package to arrive. :D

Dave Stott
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Re: Strings by Mail and Michigan Use Tax

Post by Dave Stott » Fri May 06, 2016 4:09 pm

Same here. Just ordered strings from here in Connecticut and I was charged Michigan sales tax.
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robin loops
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Re: Strings by Mail and Michigan Use Tax

Post by robin loops » Fri May 06, 2016 4:13 pm

Just don't order anything from Michigan until they realize it's killed their commerce.
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soltirefa
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Re: Strings by Mail and Michigan Use Tax

Post by soltirefa » Fri May 06, 2016 4:17 pm

robin loops wrote:Just don't order anything from Michigan until they realize it's killed their commerce.
My sentiments exactly. Even though I already have plenty of strings, I did have my eye on the Peterson Strobe Clip On Tuner from SBM. Now I am considering looking for a local dealer or an online dealer from a state that does not charge their state's sales tax. Not good for SBM that people would consider another source.

Hmm, I wonder if Guitar Center has those Peterson tuners. I can just walk in to get it.

Andrew Pohlman
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Re: Strings by Mail and Michigan Use Tax

Post by Andrew Pohlman » Fri May 06, 2016 4:19 pm

My son and I used to operate a mail order business in the 90's. The rule back then was "point of sale", meaning that you only pay tax at the point of sale. So if you ordered from Michigan, you paid applicable sale tax for that state. Based upon what I read above, this has obviously changed...
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Re: Strings by Mail and Michigan Use Tax

Post by robert e » Fri May 06, 2016 4:58 pm

Andrew Pohlman wrote:My son and I used to operate a mail order business in the 90's. The rule back then was "point of sale", meaning that you only pay tax at the point of sale. So if you ordered from Michigan, you paid applicable sale tax for that state.
That's my understanding of sales tax. Meanwhile, "use tax" is charged by states for items bought out of state (to make up for loss of revenue vs that item being bought locally, and to encourage local commerce).

So--and please correct me if I'm wrong--riffmeister paid MI sales tax (not use tax), and still owes PA use tax?

riffmeister
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Re: Strings by Mail and Michigan Use Tax

Post by riffmeister » Fri May 06, 2016 5:13 pm

robert e wrote:
Andrew Pohlman wrote:My son and I used to operate a mail order business in the 90's. The rule back then was "point of sale", meaning that you only pay tax at the point of sale. So if you ordered from Michigan, you paid applicable sale tax for that state.
That's my understanding of sales tax. Meanwhile, "use tax" is charged by states for items bought out of state (to make up for loss of revenue vs that item being bought locally, and to encourage local commerce).

So--and please correct me if I'm wrong--riffmeister paid MI sales tax (not use tax), and still owes PA use tax?
From Wikipedia:

"For example, a resident of Massachusetts, with a 6.25% "sales and use tax" on certain goods and services, purchases non-exempt goods or services in New Hampshire for use, storage or other consumption in Massachusetts. Under New Hampshire law, the New Hampshire vendor collects no sales taxes on the goods, but the Massachusetts purchaser/user must still pay 6.25% of the sales price directly to the Department of Revenue in Massachusetts as a use tax. If the same goods are purchased in a US state that does collect sales tax for such goods at time of purchase, whatever taxes were paid by the purchaser to that state can be deducted (as a tax credit) from the 6.25% owed for subsequent use, storage or consumption in Massachusetts. With few exceptions, no state's vendors will charge the native state's sales tax on goods shipped out of state, meaning all goods ordered from out-of-state are essentially free of sales tax. The purchaser is therefore required to declare and pay the use tax to his home state on these ordered goods."

So it looks like I can deduct the MI sales tax I paid to SBM from the PA sales/use tax........6% - 6% = 0%........I like that number!

Dave Stott
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Re: Strings by Mail and Michigan Use Tax

Post by Dave Stott » Fri May 06, 2016 7:38 pm

I always do a order comparison between SBM and JS before finalizing my orders.

JS has free shipping, but even when SBM's shipping costs are added, SBM typically has what I want at a cheaper total price.

This added 6% fee being added to all orders for Michigan taxes to orders will now offset the comparison enough to sway me to go elsewhere in the future.

I stayed with SBM for this order, only because they are offering a 5% discount to "celebrate" their new website being accessible to mobile phone orders and viewing.

FYI.. the discount code is "5Mobile". I'm not sure when it expires
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robert e
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Re: Strings by Mail and Michigan Use Tax

Post by robert e » Fri May 06, 2016 7:59 pm

riffmeister wrote: So it looks like I can deduct the MI sales tax I paid to SBM from the PA sales/use tax........6% - 6% = 0%........I like that number!
I like that number, too! But of course things are a little more complicated. According to PA DOR, if you live in Allegheny or Philadelphia counties, you'd theoretically owe a bit more, but, for all of your small purchases (items that cost less than $1,000) you can optionally use their table of estimated annual use tax owed based on income.

https://www.doreservices.state.pa.us/eS ... se_tax.htm

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Re: Strings by Mail and Michigan Use Tax

Post by soltirefa » Sun May 08, 2016 3:40 am

My brother (who also lives in California) bought some ukulele strings from SBM today and was not charged Michigan sales tax. He said when he was going through check out that it did show sales tax, but when he clicked to proceed, the sales tax was removed. We are speculating that certain states are not charged the Michigan tax and others are.

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