New online sales tax collection (non pinside style)

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KingPin Games
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New online sales tax collection (non pinside style)

Post by KingPin Games »

I am not looking to rehash the (at last look) 7 pages of pinside drama, but I am looking for some insight.

I (as a company) somewhat struggle to sell nib games locally because of previous sales tax regulation. Previous regulations stated that if I (the seller) and you (the buyer) are in the same state then I am required to collect sales tax. Whereas if I (the seller) and you (the buyer) are in different states, then it is up to your all American good citizen conscious to declare to the government that you purchased an item and would like to know where to send your hard earned money to pay the tax on said purchase.

With the new laws now in place (effective 10/1/18) I am curious if that will change some of your standings. I am curious since I have lots of out of state customers and have asked some of them the same question.

"With all prices being equal, are you going to start buying from your local distributor now?"

Technically shipping costs could be lower as I usually either pick games up myself (spooky, cgc, america and stern) or have them shipped at least 4 at a time from jjp to help bring the costs down.

I'm not trying to persuade anyone over to buying from me, just curious on the thoughts of "reasons to stick with an out of state dealer" now that almost all the big out of state dealers will also have to collect Wisconsin sales tax.

Thank you for your thoughts.

Christopher
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DeaconBlooze
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Re: New online sales tax collection (non pinside style)

Post by DeaconBlooze »

Since my wife is a straight-laced CPA, I've always paid sales tax on any online purchase. I also used to work for an online retailer, and there was real concern over how this law would affect our business, since most people either dont abide by those laws, or had no idea of their obligation to pay their own state's tax. The latter seemed true in most cases. Shipping was already a real challenge - we were transparent in showing shipping costs to customers, while competitors offered "free shipping" ( which of course doesnt really exist).

I love supporting local businesses whenever I can, so honestly if prices are the same and the products available, there's no question I'd support my local company. That said, if I wasnt previously purchasing locally, I'm already happy with my distributor, and prices remain the same, I don't think I dont think I'd change my buying habits.
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Chris K
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Re: New online sales tax collection (non pinside style)

Post by Chris K »

Honestly? Yeah, sales tax is a big deal to me on a big-ticket item like this. I should probably care more about the little stuff, as it seems half my paycheck ends up at Amazon these days, but it’s tougher to swallow sales tax on a single $5K+ item than it is to be nickel-and-dime’ed a couple times a week on ephemera.

We don’t get many at-bats at buying new tables, so it’s not like our buying habits for pinball are going to be noticeable, but with our old house now sold (FINALLY) I have a mental clock ticking on a MBr, and if when it’s time for us to buy that’s still the plan, you’ll be our first call.

I’m sorry to say that the sales tax thing is such a big factor for me, but hundred dollar bills is where I stand up and take notice. Our reasons to buy out-of-State in the past are 100% due to sales tax.

As an aside, I think it’s high time the US started creeping towards a national VAT, as long-distance purchases are almost the norm for many products these days.
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u2sean
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Re: New online sales tax collection (non pinside style)

Post by u2sean »

I think it's going to be interesting to see how this actually plays out. It's been in effect since 10/1/18 as you mentioned, but all of a sudden it's become a big deal 1/1/19? How many purchases made in Q4 2018 had collections made on them?

It places a big burden on small businesses who now have to collect and pay taxes in every state they sell to. I'm sure there are brokerages / services available to do this for you, but just another cost to small businesses. Now, if you're in an origin based state (OH, IL, TX, etc.) they will collect the tax for THEIR state as opposed to taxes of the destination the seller resides in. Also, if you're a really small distributor with less than $100K in sales annually or fewer than a few hundred transactions you don't need to collect? The criteria for this are just stupid.

If you are buying a $6K "toy" an additional $330 likely isn't going to steer most away from the purchase. If others order from distributors out of state that are origin based and collect their sales tax, if that rate is higher it'd mean a higher cost to purchase from them instead of locally so may be beneficial to locals since WI has the 4th lowest sales tax rate in the nation. At the end of the day, this is going to end up being as big of a deal as the $1 IFPA tournament entry fee.

For me personally, I prefer to purchase local. If all things are equal financially, then purchasing local is going to be the new norm nationwide assuming everyone plays by the rules.

Final thought: this will probably increase the cost of used games as well since the "real" cost of games has now gone up.
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ralphwiggum
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Re: New online sales tax collection (non pinside style)

Post by ralphwiggum »

I am not a frequent NIB buyer, but the tax thing doesnt bother me nearly as much as being able to purchase with a Credit Card. If credit card pricing was equal to cash on the glass pricing, I may be willing to pull the trigger a bit more. The rewards I get for being a good steward of paying off my Credit Card each month can (at times) eliminate the sales tax altogether.

All of this really doesnt pertain to me anymore though, because NIB pricing has reached the point for me where I am not seeing bang for the buck value. There are a lot of fun non-pinball toys out there in the 6-12k range.
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Chris K
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Re: New online sales tax collection (non pinside style)

Post by Chris K »

Interesting parallel! The $1 IFPA “tax” is a turn-off for me; an actual factor in if I turn out as often. Not as big a factor as tax on pinball tables, obviously. I understand I’m probably an outlier on that one. (Although I tried to get two friends to come out, and both said “I have to pay to play, pay to enter, and there’s no purse? No thanks.”)

I guess I just have a serious allergy to spending more money than I think I should, on ANYTHING. I think that’s a pretty common sentiment in consumer consciousness; you can see it echoed in local butchers versus grocery stores, big box vs mom-and-pop, and local stores vs Amazon. I’m not saying it’s not a destructive behavior in some cases, but it’s a real phenomena. Even our products are made with price as the primary virtue these days (see: anything for sale at Harbor Freight versus Snap-On and such).

This was a loophole that obviously drove consumer behavior towards purchasing from out-of-State vendors, not just for Wisconsinites, but nationwide. The closing of the loophole will re-level the playing field, and to answer the original question again, it will definitely affect my purchasing behavior. For what little opportunity I will have to purchase, at least.

I hadn’t thought about the mechanics of collection... I suppose we could look to our Federal government to take the lead and create a unified tax collection structure for the State portion of sales tax! Oh, right. Nevermind that. :roll:
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Star Trek: The Next Generation, Scared Stiff, Black Hole, Roy Clark, Monster Bash Remake, Future Spa, Big Deal, Top Score, Baywatch, Rick and Morty, TMNT, Sinbad, Guns N Roses
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