CAUTION TENNESSEE BUILDERS!!

[mechdave]

From now on I'll be building with localy bought Elmer's as far as they're concerned.

[Daddy]

When I registered my Nina in Vermont I had to pay sales tax on everything I bought out of state. I am pretty sure that I found all of the receipts. Trouble cam when the nice lady behind the counter wanted me to pay on the motor too which I had purchased locally and had a receipt for. Had quite an argument until she gave up and gave me the registration without additional tax on the motor. I am not sure these folks are very well trained as to what is taxable and what is not. No way I would pay the tax twice on that motor. The guy who came to inspect the boat and give it an HIN was armed, had handcuffs on his belt and was only interested in whether or not the boat had been stolen. That was easy.

[gstanfield]

That is a different situation, but to be honest I disagree 100% with having to pay sales tax after the fact. If they want to collect sales tax on stuff you bought online then the states need to figure out a way to make that happen when you purchase it, not afterwards.

For example, if I buy a new tonneau cover for my truck on ebay should I have to cough up an extra $80 in sales tax the next time I renew my license plate? I also read a LOT and order 2 or 3 books a month off of amazon. Should I have to go down to the library and give them a few hundred bucks a year for sales tax on books I bought online?

NO, I should not. Like I said before, online items are not taxed on anything else so why should you have to pay sales tax after the fact on something you built. I already paid taxes on my income, why am I taxed again on the same money when I spend it? Isn't that double taxation?

OK, I gotta stop before I get my blood pressure too high. BTW, I have sent out so many e-mails today about this situation. Let's see if I get any response from the governor of TN or the legislators I sent e-mails to today

[gstanfield]

well so far things are starting to head in the right direction. At least a legislator is getting fired up on the matter, maybe he can help turn this thing around

TN Dept. of Revenue speaks out on boat controversy
Posted: Feb 10, 2012 9:39 PM CST
Updated: Feb 10, 2012 10:09 PM CST
Posted by Nancy Amons - email
MURFREESBORO, TN (WSMV) - A state representative thought it was a joke when he heard that a father and his young son had been labeled as "boat dealers" because of a small, wood boat they built in their garage.

The family has been getting letters from the Tennessee Department of Revenue threatening them with court actions, fines and liens if they didn't pay $539 in taxes on their fishing boat.

Johnathan King and his 7-year-old son Carter spent three weeks assembling the 14-foot boat according to plans they ordered over the Internet. After registering the boat, they started getting correspondence from the revenue department referring to them as "boat manufacturers and dealers."

State representative Joe Carr didn't believe it when he first heard about it.

"I initially thought it was a joke, because it was so absurd," Carr says.

"No reasonable person would believe that Mr. King is in the manufacturing business for boats," he says.

"Initially, I thought it was an error," King says. After he told the state this was just a small fishing boat the two had built at home, he expected the revenue department would relent, but they did not.

"To put it politely, I thought it was quite silly," King says.

Carr says either revenue is misinterpreting the law and taking it to an extreme, or the law needs to be fixed. He meets with revenue officials Monday.

If their theory holds true, he says, it's a slippery slope.

"If, as an individual, I go to Home Depot or Lowe's or some lumber yard, and I decide I'm going to build a picnic table for my patio, does that make me a furniture manufacturer?" Carr says.

Since Channel 4 first reported the story Wednesday, the topic has been widely discussed on blogs across the country.

"Seems ludicrous," someone from the northeast wrote on woodenboat.com. "Can't be a manufacturer or dealer if you're not making the product for sale."

The Department of Revenue issued a statement after we asked them for three days to explain their position.

"It is not the Department's position that an individual who builds a boat from a kit or component parts is in the business of selling boats," write communications manager Billy Trout.

The statement says the term"dealer," which is used in the tax statutes, also refers to a purchaser. They regret if information from the department was confusing.

The revenue department's statement explains that state statutes protect taxpayer privacy, and therefore, they cannot discuss tax matters involving particular taxpayers.

"We would like to provide some general information about use tax and boats," the statement says.

"Generally, sales tax is collected by the seller when an item, such as a boat, a boat kit, or component parts, are purchased. Sometimes, such as when the item is purchased outside the state, the tax is not collected by the seller. In those cases, the purchaser must pay, under state law, a "use tax" on the item. Use tax is equal to the sales tax that normally would have been collected by the seller. The purpose of use tax is to ensure that all purchases are taxed alike, whether bought from a seller in Tennessee or outside the state.

"When a boat is registered, the boat owner is required by law to document that sales or use tax was paid on the price of the boat. If the boat was built from a kit or other component parts, the owner must show that sales or use tax was paid on the kit or parts. Receipts or invoices are acceptable proof, as are records that show the taxpayer paid use tax directly to the Department of Revenue. When no information is provided, the Department must determine whether tax is due."

King says he's pulling together invoices and receipts for all the building materials used in the boat, but it's difficult, since some materials were purchased as much as three years ago.

He says he's absolutely not a boat dealer, and would never sell the boat, which he considers an heirloom to be passed on to his son's children some day.

"It ought to last 30 or 40 years," King says.

"We must now defend ourselves as dealers. I'm still trying to get my mind around the docket, 'Tennessee Department of Revenue vs. Carter King, 7 years old,'" King says.

Copyright 2012 WSMV (Meredith Corporation). All rights reserved

http://www.wsmv.com/story/16912107/reve ... ontroversy

[NW Trout]

The story is true,
Governments are under pressure to squeeze as much $ as possible out of every one.

Unelected burokrats rule without any common sense.
Welcome to socialism.

I would say more but my opinion about this belongs to the bilge section.

Unelected employees without common sense? Agree.
Socialism??? Not even close. And can't see in any way how it is applicable in this situation (or most situations where its tossed about these days.)

Socialism is an economic system characterized by social ownership or control of the means of production and cooperative management of the economy, and a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises, common ownership, direct public ownership or autonomous state enterprises. There are many variations of socialism and as such there is no single definition encapsulating all of socialism. They differ in the type of social ownership they advocate, the degree to which they rely on markets versus planning, how management is to be organized within economic enterprises, and the role of the state in constructing socialism.

A socialist economic system would consist of an organization of production to directly satisfy economic demands and human needs, so that goods and services would be produced directly for use instead of for private profit driven by the accumulation of capital, and accounting would be based on physical quantities, a common physical magnitude, or a direct measure of labour-time. Distribution of output would be based on the principle of individual contribution.

As a political movement, socialism includes a diverse array of political philosophies, ranging from reformism to revolutionary socialism. Proponents of state socialism advocate for the nationalisation of the means of production, distribution and exchange as a strategy for implementing socialism. Social democrats advocate redistributive taxation in the form of social welfare and government regulation of capital within the framework of a market economy. In contrast, anarchism and libertarian socialism propose direct worker's control of the means of production and oppose the use of state power to achieve such an arrangement, opposing both parliamentary politics and state ownership over the means of production.

[Cracker Larry]

I'm with Jacques

[TRC886]

I'm with Jacques

Me too

[Prarie Dog]

John, could you please cite your quote so we can check out your material. It looks like some very interesting reading.

[Cracker Larry]

Wikipedia

[jacquesmm]

I am not going to debate if abusive government is named socialism or fascism or statism, that debate belongs in our "Bilge" section but we can all agree that this is an example of government out of control.

The response from the TN dept. of revenue is dishonest, this was not about sales tax. They wanted to charge him a tax as a dealer in addition to sales tax but I am glad to see them back pedaling.

About sales tax, we have discussed this a few times but in a nutshell:
- we collect sales tax on all sales in Florida but not on out of state sales
- those who buy supplies out of state must comply with their local taxes and pay what most states call a "use tax".
That are the current laws.
I know that some will say it isn't right and that there are better solutions but that becomes a political debate, see the "Bilge" section of this forum.
Right now, the only way states can check if you paid the use tax is at the time of registration.
Keep your invoices. On whatever you bought locally, the sales tax should already be included and you don't have to pay it a second time. On what you bought from us, try not to loose too many invoices , show them what you have and pay the tax.

And if you don't like the current tax system, register to vote and vote as I do.