Retroactive Sales Tax

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Joe G a l e w s k i
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Retroactive Sales Tax

#1 Post by Joe G a l e w s k i » September 5th, 2019, 4:34 pm

I was asked today to pay sales tax on an order I placed from a California winery in February 2019. Is it reasonable to pay sales tax for a transaction 6 months ago?

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Re: Retroactive Sales Tax

#2 Post by John Morris » September 5th, 2019, 4:39 pm

When did the new law go into effect, requiring tax be charged on interstate shipments? January or February, I'd guess. They could face some heat from tax or liquor authorities if they don't collect it, though if they screwed up, you'd think they might want to eat it in the interests of customer relations.
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Re: Retroactive Sales Tax

#3 Post by JBucholz » September 6th, 2019, 7:06 am

Most likely, the winery had a visit from the California Board of Equalization and got a bill for uncollected sales tax on out of state sales. They are now trying to collect on what they should have been collecting all along in order to cover their tax bill.
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Re: Retroactive Sales Tax

#4 Post by John Kight » September 6th, 2019, 7:15 am

JBucholz wrote:
September 6th, 2019, 7:06 am
Most likely, the winery had a visit from the California Board of Equalization and got a bill for uncollected sales tax on out of state sales. They are now trying to collect on what they should have been collecting all along in order to cover their tax bill.
Legally, though, they may technically be required to "collect" the sales tax (rather than simply pay it). I'm not sure about that. Obviously the state's only interest is in getting paid, but I believe some state laws technically require that the tax be collected from the buyers.

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Re: Retroactive Sales Tax

#5 Post by Sh@n A » September 6th, 2019, 7:32 am

Retailer in NY would not release some Bordeaux futures I purchased last year, unless I paid sales tax.
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Re: Retroactive Sales Tax

#6 Post by Tom G l a s g o w » September 6th, 2019, 7:32 am

Joe G a l e w s k i wrote:
September 5th, 2019, 4:34 pm
I was asked today to pay sales tax on an order I placed from a California winery in February 2019. Is it reasonable to pay sales tax for a transaction 6 months ago?
Who is asking, the winery or the state?

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Re: Retroactive Sales Tax

#7 Post by Rich Salsano » September 6th, 2019, 7:40 am

Tom G l a s g o w wrote:
September 6th, 2019, 7:32 am
Joe G a l e w s k i wrote:
September 5th, 2019, 4:34 pm
I was asked today to pay sales tax on an order I placed from a California winery in February 2019. Is it reasonable to pay sales tax for a transaction 6 months ago?
Who is asking, the winery or the state?
Yeah. That’s the question I have as well. If the state, pay it. If the winery, you can decide whether you want to pay it or not. I am surprised the winery is trying to go back and collect tax from customers on historical shipments. I would have thought they just updated their process for future sales and pay the back tax out of their own pocket for customer retention purposes.
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Re: Retroactive Sales Tax

#8 Post by JulianD » September 6th, 2019, 7:55 am

Rich Salsano wrote:
September 6th, 2019, 7:40 am
pay the back tax out of their own pocket for customer retention purposes.
are you really going to drop them over taxes?
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Re: Retroactive Sales Tax

#9 Post by Tom G l a s g o w » September 6th, 2019, 8:01 am

JulianD wrote:
September 6th, 2019, 7:55 am
Rich Salsano wrote:
September 6th, 2019, 7:40 am
pay the back tax out of their own pocket for customer retention purposes.
are you really going to drop them over taxes?
I think it’s more of a general observation on business practices. I think it’s a big ask for a winery to cover sales tax.

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Re: Retroactive Sales Tax

#10 Post by John Morris » September 6th, 2019, 8:07 am

Tom G l a s g o w wrote:
September 6th, 2019, 8:01 am
JulianD wrote:
September 6th, 2019, 7:55 am
Rich Salsano wrote:
September 6th, 2019, 7:40 am
pay the back tax out of their own pocket for customer retention purposes.
are you really going to drop them over taxes?
I think it’s more of a general observation on business practices. I think it’s a big ask for a winery to cover sales tax.
You mean retroactively? You don't think it's a big ask as a general matter, I assume.

The new law was pretty well publicized by retailers who ship across state lines. I guess you weren't aware of that. I assume this is not a large winery or they would have been in compliance. Seems like the kind of mistake a small producer, without regular legal advice, might make.
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Re: Retroactive Sales Tax

#11 Post by Neal.Mollen » September 6th, 2019, 8:33 am

The tax existed when you bought the wine; they just didn't have the system in place to collect it. You made the purchase, incurred the tax, and I'd just pay it if this were me.
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Re: Retroactive Sales Tax

#12 Post by Rajesh P a r i k h » September 6th, 2019, 9:12 am

Neal.Mollen wrote:
September 6th, 2019, 8:33 am
The tax existed when you bought the wine; they just didn't have the system in place to collect it. You made the purchase, incurred the tax, and I'd just pay it if this were me.
I’m by no means a tax expert, but doesn’t the purchase trigger the tax and either the seller or purchaser could bear all or a portion of the tax? It’s just typical in the US for the purchaser to bear the full tax.

I wasn’t aware that it was required for the purchaser to pay the sales tax instead of the seller.

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Re: Retroactive Sales Tax

#13 Post by JonathanG » September 6th, 2019, 9:15 am

Technically a sales tax is a tax on the buyer, but the seller has the obligation to collect/remit. Where the seller does not collect/remit, the buyer is obligated to pay a use tax (but no one ever does, hence the reason every state wants retailers to charge sales tax on interstate commerce.) This issue of retailers not charging sales tax has recently gone to the Supreme Court and now the threshold for retailers to charge sales tax on interstate commerce is way lower. So some smaller guys that, all of the sudden had to register/charge sales tax were caught not paying attention and didn't start collecting tax when the local tax authorities were pursuing every dime.

Assuming your purchase was shipped across state lines - did they charge you sales tax for the state they are in, or did they charge you sales tax for your state?

In Europe, all pricing is inclusive of VAT, so it removes the issue altogether.
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Re: Retroactive Sales Tax

#14 Post by JonathanG » September 6th, 2019, 9:17 am

John Morris wrote:
September 5th, 2019, 4:39 pm
When did the new law go into effect, requiring tax be charged on interstate shipments? January or February, I'd guess. They could face some heat from tax or liquor authorities if they don't collect it, though if they screwed up, you'd think they might want to eat it in the interests of customer relations.
The "new law" depends on the state, but all roads lead back to the recent Wayfair case that changed the game on how state sales tax regimes can apply in the digital world. Several states passed legislation requiring more out of state retailers to charge local sales tax hoping that Wayfair came out in favor of the states.
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Re: Retroactive Sales Tax

#15 Post by Tom G l a s g o w » September 6th, 2019, 12:56 pm

John Morris wrote:
September 6th, 2019, 8:07 am
Tom G l a s g o w wrote:
September 6th, 2019, 8:01 am
JulianD wrote:
September 6th, 2019, 7:55 am


are you really going to drop them over taxes?
I think it’s more of a general observation on business practices. I think it’s a big ask for a winery to cover sales tax.
You mean retroactively? You don't think it's a big ask as a general matter, I assume.

The new law was pretty well publicized by retailers who ship across state lines. I guess you weren't aware of that. I assume this is not a large winery or they would have been in compliance. Seems like the kind of mistake a small producer, without regular legal advice, might make.
Yes, I was referring to the OP’s situation. The winery needs to collect sales tax from the buyer if required.

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Re: Retroactive Sales Tax

#16 Post by GregP » September 6th, 2019, 12:59 pm

JBucholz wrote:
September 6th, 2019, 7:06 am
Most likely, the winery had a visit from the California Board of Equalization and got a bill for uncollected sales tax on out of state sales. They are now trying to collect on what they should have been collecting all along in order to cover their tax bill.
CA winery is not required to charge/collect out of state sales tax on ONLINE DTC sales. The only "extra" box a winery fills out when reporting to California Board of Equalization is when it collects sales taxes above the total sales threshold WITHIN the state of CA. In other words, per law, if total DTC sales are under $500K per year WITHIN state of CA, then a flat state wide sales tax is to be collected/remitted, if above the $500K level, then same flat tax PLUS sales tax surcharge for the district/county/municipality of CALIFORNIA wine buyer and matching what a wine buyer would pay if buying locally. For example, if a winery's total sales per year are above $500K, then its the same flat state wide tax of 7.25% to be charged and remitted, and then additional local county/municipality surcharge for, say as an example, LA County, which may be another 1.25% on top of 7.25% (flat tax rate), for a total of 8.50%, or whatever the sales tax rate for LA County is these days. Or even municipality within. Basically, sales tax a wine buyer would pay at his/her local wine shop.

Actually becomes a nightmare for small(er) guys when they need to collect proper sales tax if/when they pass the $500K sales annual number, they need to create and then maintain a table for each and every local sales tax within CA. Almost all then pay someone to do that, an extra (hefty) expense to be sure, which wasn't there until recent times. Added to production costs, and passed along to wine buyers in the end.

BUT. Total for out of state DTC sales is entered into a separate box that does not require any sales statement reporting, NOR COLLECTION by California Board of Equalization. Its between a winery and whatever the state of residence of wine buyer happens to be.

OTOH, a winery with a sale to NY resident, say, may want to collect NY state sales tax, and then remit it to state of NY. But, again, this has nothing to do with CA Board of Equalization record keeping and tax collection.

What the OP is not saying is how the actual purchase was made, online or in person. If in person, then yes, the winery had to charge/collect the sales tax (local to them) and then report/remit to state of CA. If online, then No, not sure what's being claimed by the winery, if so.
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Re: Retroactive Sales Tax

#17 Post by AndrewH » September 6th, 2019, 1:42 pm

Has OP already received the order (it's not clear)? If so, I'd be more reluctant to pay as the transaction is complete. If not, then I think if you're upset about it you should cancel the order on the ground they changed the price (even if as a result of the state's greater enforcement) retroactively, and that affected your purchase decision. But if you still want the wine, even with tax added, then you should pay.
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Re: Retroactive Sales Tax

#18 Post by Joe G a l e w s k i » September 6th, 2019, 2:05 pm

Thanks for your responses.

The California winery is asking me to pay Minnesota sales tax on an order I have not received yet. I was planning on paying it, but thought I'd ask the group about the situation, as my first thought is that they're changing the terms of the purchase. But as some of you pointed out, it was likely an error that they didn't collect tax, and they are required to do so.

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Re: Retroactive Sales Tax

#19 Post by Neal.Mollen » September 6th, 2019, 2:11 pm

Joe G a l e w s k i wrote:
September 6th, 2019, 2:05 pm
Thanks for your responses.

The California winery is asking me to pay Minnesota sales tax on an order I have not received yet. I was planning on paying it, but thought I'd ask the group about the situation, as my first thought is that they're changing the terms of the purchase. But as some of you pointed out, it was likely an error that they didn't collect tax, and they are required to do so.
I would assume that the winery had to promise to collect and remit as a condition of getting the necessary permits to ship lawfully into the state.
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Re: Retroactive Sales Tax

#20 Post by John Morris » September 6th, 2019, 2:31 pm

Joe G a l e w s k i wrote:
September 6th, 2019, 2:05 pm
Thanks for your responses.

The California winery is asking me to pay Minnesota sales tax on an order I have not received yet. I was planning on paying it, but thought I'd ask the group about the situation, as my first thought is that they're changing the terms of the purchase. But as some of you pointed out, it was likely an error that they didn't collect tax, and they are required to do so.
So you haven't received it yet! I think that makes all the difference. I bet they weren't legally required to collect it back in February because it wasn't being shipped into Minnesota then.

From your original post, I assumed you'd received the wine and they were trying to come after you for tax seven months later, which would have been annoying. I'm still a bit surprised that they didn't warn you at the time of purchase that you'd have to pay the tax. But I can see why they wouldn't collect it then. If the order was somehow cancelled before delivery, it would be a nightmare to get a refund.
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Re: Retroactive Sales Tax

#21 Post by markjchambers » September 7th, 2019, 3:41 pm

If you want to buy directly from wineries that are out of state and have them legally ship the wine you have to pay your state's sales tax. That's the way it works in Ohio and I assume it's the
same everywhere else.

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Re: Retroactive Sales Tax

#22 Post by Michael O'Brien » September 7th, 2019, 3:47 pm

For some months, I have been asked by some wineries to pay sales tax. They are inconsistent as to whether they charge me CA or TX sales taxes. JJB is now charging Texas sales tax on all of my orders. That is a relatively new occurrence.
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Re: Retroactive Sales Tax

#23 Post by NickRut » September 7th, 2019, 4:26 pm

I wouldn’t pay it. If they misbilled you that’s on them. If it was something egregious maybe I’d have a different view but I wouldn’t budge on this one unless there was a very compelling reason.
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Re: Retroactive Sales Tax

#24 Post by JonathanG » September 7th, 2019, 5:55 pm

i do have to symphatize with the winery on this one. The old regime let interstate sales happen and no one ever collected sales tax. After the Supreme Court ruling in Wayfair, that all changed, so now everyone has to pay sales tax. And the winery is just trying to comply with sales tax rules that have upended the old regime. All your other online retailers that don't charge you sales tax will probably start doing so very shortly for the same reason. Seems a bit unfair to stuff the winery on this when in reallity you should have paid it. Kind of like keeping that extra $10 bill when the cashier makes a mistake... Just my $0.02
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Re: Retroactive Sales Tax

#25 Post by Al Osterheld » September 7th, 2019, 6:19 pm

The Minnesota requirement for out of state entities to collect and remit sales tax for goods shipped into Minnesota is quite recent. I believe they passed a law that could only be enforced if the Wayfair case was decided in favor of states, and I think it goes into effect for goods shipped after October 1. They didn't mis-bill. Sounds like these must be futures. If it were me, I'd either tell the winery I no longer want the wine (actually, I wouldn't), or I'd pay it. But, I would not expect them to eat it. Of course, I've been paying use tax on my similar shipments for years, so it would be a push for me.

I believe there is a small seller exemption, don't know whether this winery would qualify.

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Re: Retroactive Sales Tax

#26 Post by Randy Bowman » September 7th, 2019, 7:30 pm

Many wineries pay big bucks for a person to handle compliance issues, both licensing and tax related. California has a "use tax" in place. You are supposed to keep receipts of out-of-state purchases and apply your local tax rate, paying it when filing tax returns. That's probably what most states have and some are now taking action to collect that tax money.
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Re: Retroactive Sales Tax

#27 Post by JonathanG » September 7th, 2019, 10:12 pm

States that pursue the use tax would do so directly against the consumer, not the seller.
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Re: Retroactive Sales Tax

#28 Post by John Morris » September 8th, 2019, 5:46 am

Randy Bowman wrote:
September 7th, 2019, 7:30 pm
Many wineries pay big bucks for a person to handle compliance issues, both licensing and tax related. California has a "use tax" in place. You are supposed to keep receipts of out-of-state purchases and apply your local tax rate, paying it when filing tax returns. That's probably what most states have and some are now taking action to collect that tax money.
It's not a use tax the states are now collecting. It's sales tax on purchases from out of state, and the seller has to collect that. It's all because of the Wayfair Supreme Court decision last year, which reversed earlier decisions and allowed states to collect sales tax from businesses based elsewhere even if they don't have a physical presence in the state to which they are shipping (a requirement in the past). States have to enact laws to take advantage of this, however, so the collections did not start immediately.

There's a pretty good discussion of the impact of the decision here:
https://www.theregreview.org/2018/07/24 ... -decision/
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Re: Retroactive Sales Tax

#29 Post by Robert M yers » September 8th, 2019, 6:05 am

Why are retailers collecting tax for the state in which they reside?

Wineries collect for the state they are shipping to, as does every other retailer (Amazon ect)

I get that they claim the purchase is being made there, but that goes against all other commerce online. If I order from NY and pay their tax, that’s good enough for my state now? Somehow I think they will disagree.

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Re: Retroactive Sales Tax

#30 Post by John Morris » September 8th, 2019, 6:16 am

Robert M yers wrote:
September 8th, 2019, 6:05 am
Why are retailers collecting tax for the state in which they reside?
Who's doing that? I think some people here assumed that's what was happening.
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Re: Retroactive Sales Tax

#31 Post by John Glas » September 8th, 2019, 6:47 am

The Minnesota requirement for out of state entities to collect and remit sales tax for goods shipped into Minnesota is quite recent. I believe they passed a law that could only be enforced if the Wayfair case was decided in favor of states, and I think it goes into effect for goods shipped after October 1. They didn't mis-bill. Sounds like these must be futures. If it were me, I'd either tell the winery I no longer want the wine (actually, I wouldn't), or I'd pay it. But, I would not expect them to eat it. Of course, I've been paying use tax on my similar shipments for years, so it would be a push for me.

I believe there is a small seller exemption, don't know whether this winery would qualify.
There goes most of my purchases in California unless it is something MN does not carry. Shipping costs were always under the tax amount on most purchases so now paying shipping and tax is going to make it too expensive.

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Re: Retroactive Sales Tax

#32 Post by AndrewH » September 8th, 2019, 8:29 am

Robert M yers wrote:
September 8th, 2019, 6:05 am
Why are retailers collecting tax for the state in which they reside?

Wineries collect for the state they are shipping to, as does every other retailer (Amazon ect)

I get that they claim the purchase is being made there, but that goes against all other commerce online. If I order from NY and pay their tax, that’s good enough for my state now? Somehow I think they will disagree.
generally they *should* be collecting for the state the purchaser is located in (which is now allowed per the Wayfair decision). But some wineries I have seen consider title to pass in California (usually) when they ship the wine - i.e., they sell it to you in California and then ship it on your behalf (kind of like if you actually purchased at the winery). I assume this is skirting the rules on having a permit to ship to a given state (or whatever requirements they need to meet), but at least they're in tax compliance, while avoiding the costs of complying with the shipping laws of most/all other states.
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Re: Retroactive Sales Tax

#33 Post by Robert.A.Jr. » September 8th, 2019, 12:19 pm

Last year I had the State Dept of Revenue send me an audit letter for three years of out-of-state wine purchases. Evidently they had kept track of the many dozens of cases I had shipped in. Don’t know why, but I had operated with the understanding that internet sales were tax free. They are not. I owed a big tax check, plus penalties and interest. Was 100% my bad. Taxes were due.

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Re: Retroactive Sales Tax

#34 Post by Sh@n A » September 8th, 2019, 12:37 pm

Robert.A.Jr. wrote:
September 8th, 2019, 12:19 pm
Last year I had the State Dept of Revenue send me an audit letter for three years of out-of-state wine purchases. Evidently they had kept track of the many dozens of cases I had shipped in. Don’t know why, but I had operated with the understanding that internet sales were tax free. They are not. I owed a big tax check, plus penalties and interest. Was 100% my bad. Taxes were due.
How did they keep track and know what you purchased where? Did you buy as an individual?
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Re: Retroactive Sales Tax

#35 Post by Robert.A.Jr. » September 8th, 2019, 1:28 pm

Sh@n A wrote:
September 8th, 2019, 12:37 pm
Robert.A.Jr. wrote:
September 8th, 2019, 12:19 pm
Last year I had the State Dept of Revenue send me an audit letter for three years of out-of-state wine purchases. Evidently they had kept track of the many dozens of cases I had shipped in. Don’t know why, but I had operated with the understanding that internet sales were tax free. They are not. I owed a big tax check, plus penalties and interest. Was 100% my bad. Taxes were due.
How did they keep track and know what you purchased where? Did you buy as an individual?
They didn’t. They do spot audits and I guess my name popped up a lot because of wine, art and other things that I ship into the state. They sent me a self-audit letter, which if I did not honor, would result in a full audit by them at my expense. So I grabbed 3 years of VISA statements and did a manual, self-audit. Took a lot of time, but I was not going to take any chances.

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Re: Retroactive Sales Tax

#36 Post by Sh@n A » September 8th, 2019, 1:52 pm

Robert.A.Jr. wrote:
September 8th, 2019, 1:28 pm
So I grabbed 3 years of VISA statements and did a manual, self-audit. Took a lot of time, but I was not going to take any chances.
Oh man. I rotate my credit cards out for the points. I guess it gives the added bonus of plausible deniability... as long as they do not find my CT account pileon
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Re: Retroactive Sales Tax

#37 Post by AndrewH » September 8th, 2019, 2:48 pm

Robert.A.Jr. wrote:
September 8th, 2019, 1:28 pm
Sh@n A wrote:
September 8th, 2019, 12:37 pm
Robert.A.Jr. wrote:
September 8th, 2019, 12:19 pm
Last year I had the State Dept of Revenue send me an audit letter for three years of out-of-state wine purchases. Evidently they had kept track of the many dozens of cases I had shipped in. Don’t know why, but I had operated with the understanding that internet sales were tax free. They are not. I owed a big tax check, plus penalties and interest. Was 100% my bad. Taxes were due.
How did they keep track and know what you purchased where? Did you buy as an individual?
They didn’t. They do spot audits and I guess my name popped up a lot because of wine, art and other things that I ship into the state. They sent me a self-audit letter, which if I did not honor, would result in a full audit by them at my expense. So I grabbed 3 years of VISA statements and did a manual, self-audit. Took a lot of time, but I was not going to take any chances.
Seem odd they'd be tracking what people ship into the state (or perhaps disturbingly Orwellian). Seems more likely they somehow got a hold of shipping records of one of the companies/wineries you bought from and pursued you as a result.

FWIW, almost all (if not all) states with a sales tax also have a "use tax" or some other obligation to pay the state tax equivalent on out of state/tax free purchases that you have shipped. I think only a small percentage of people pay that, although I'd guess a large percentage of those who are audited.
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Re: Retroactive Sales Tax

#38 Post by Robert.A.Jr. » September 8th, 2019, 3:07 pm

No. I spoke with the auditor on my file. The Florida DOR has agents at the truck weighing stations on the major Florida arterial and they spot check contents. Over that three year period, I had a lot of in-state shipments, including large-scale art that is hard not to see given the odd box size. It would seem random but apparently works for them.

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Re: Retroactive Sales Tax

#39 Post by Robert M yers » September 8th, 2019, 3:42 pm

John Morris wrote:
September 8th, 2019, 6:16 am
Robert M yers wrote:
September 8th, 2019, 6:05 am
Why are retailers collecting tax for the state in which they reside?
Who's doing that? I think some people here assumed that's what was happening.
Most NY retailers are collecting NY tax (Zachy’s ect) and my last order with SommPicks they tacked on CA tax.

To be legal I assume we all need to still pay tax where we live. If you get audited like Robert I’m pretty sure your home state won’t care if you already paid out of state tax or not.

I think the big retailers Might be collecting state tax to stay off the radar of their enforcement, but that’s not going to be legit for the consumer when the tax man comes calling.

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Re: Retroactive Sales Tax

#40 Post by Yao C » September 8th, 2019, 3:52 pm

Robert M yers wrote:
September 8th, 2019, 3:42 pm
John Morris wrote:
September 8th, 2019, 6:16 am
Robert M yers wrote:
September 8th, 2019, 6:05 am
Why are retailers collecting tax for the state in which they reside?
Who's doing that? I think some people here assumed that's what was happening.
Most NY retailers are collecting NY tax (Zachy’s ect) and my last order with SommPicks they tacked on CA tax.

To be legal I assume we all need to still pay tax where we live. If you get audited like Robert I’m pretty sure your home state won’t care if you already paid out of state tax or not.

I think the big retailers Might be collecting state tax to stay off the radar of their enforcement, but that’s not going to be legit for the consumer when the tax man comes calling.
In general you owe the difference between the prevailing rate in your home state and any sales tax collected at the point of sale

Joe did the winery already process your credit card months ago, or is the first time? I work at a company that provides many large companies with sales/use tax research and software and would be happy to ask my head of Research about your situation
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Re: Retroactive Sales Tax

#41 Post by Robert M yers » September 8th, 2019, 7:26 pm

Yao C wrote:
September 8th, 2019, 3:52 pm
Robert M yers wrote:
September 8th, 2019, 3:42 pm
John Morris wrote:
September 8th, 2019, 6:16 am


Who's doing that? I think some people here assumed that's what was happening.
Most NY retailers are collecting NY tax (Zachy’s ect) and my last order with SommPicks they tacked on CA tax.

To be legal I assume we all need to still pay tax where we live. If you get audited like Robert I’m pretty sure your home state won’t care if you already paid out of state tax or not.

I think the big retailers Might be collecting state tax to stay off the radar of their enforcement, but that’s not going to be legit for the consumer when the tax man comes calling.
In general you owe the difference between the prevailing rate in your home state and any sales tax collected at the point of sale

Joe did the winery already process your credit card months ago, or is the first time? I work at a company that provides many large companies with sales/use tax research and software and would be happy to ask my head of Research about your situation
Why would I owe tax locally on something I took ownership of (because of a disclaimer) in the other state.

The question is whether your state agrees with this disclaimer, which I doubt they would if they pressed for tax info.

You are going to owe double tax if this issue is pressed imo.

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Re: Retroactive Sales Tax

#42 Post by John Morris » September 8th, 2019, 7:47 pm

I didn't think states had in the past tried to collect sales tax on sales leaving that state. That's what made buying out of state so attractive, not just for wine.
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Re: Retroactive Sales Tax

#43 Post by John Morris » September 8th, 2019, 7:50 pm

AndrewH wrote:
September 8th, 2019, 8:29 am
generally they *should* be collecting for the state the purchaser is located in (which is now allowed per the Wayfair decision). But some wineries I have seen consider title to pass in California (usually) when they ship the wine - i.e., they sell it to you in California and then ship it on your behalf (kind of like if you actually purchased at the winery). I assume this is skirting the rules on having a permit to ship to a given state (or whatever requirements they need to meet), but at least they're in tax compliance, while avoiding the costs of complying with the shipping laws of most/all other states.
That strikes me as complete BS, and a formula to get in trouble with the tax authorities at both ends of the line, particularly after Wayfair. This seems particularly risky given that they have alcohol licenses that might be jeopardized. Most wineries seem to run scared on tax issues, for good reason.
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Re: Retroactive Sales Tax

#44 Post by Robert M yers » September 8th, 2019, 7:59 pm

John Morris wrote:
September 8th, 2019, 7:47 pm
I didn't think states had in the past tried to collect sales tax on sales leaving that state. That's what made buying out of state so attractive, not just for wine.
They do now but seemingly only for wine, which for us could be a problem when each state starts staking it's claim. I’m all for paying fair tax, but don’t see how this one will be resolved once the receiving state realizes what’s going on.

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Re: Retroactive Sales Tax

#45 Post by AndrewH » September 9th, 2019, 6:28 am

Robert M yers wrote:
September 8th, 2019, 7:59 pm
John Morris wrote:
September 8th, 2019, 7:47 pm
I didn't think states had in the past tried to collect sales tax on sales leaving that state. That's what made buying out of state so attractive, not just for wine.
They do now but seemingly only for wine, which for us could be a problem when each state starts staking it's claim. I’m all for paying fair tax, but don’t see how this one will be resolved once the receiving state realizes what’s going on.
I think it's well beyond wine at this point - most major retailers are now collecting the sales tax of the state to which the online order is being shipped. Prior to Wayfair states were not able to collect that tax (or at least couldn't enforce their tax rules against out of state shippers with no in-state presence). Now they can.

So, what you should be paying is your state's sales tax on any shipments, wine or otherwise, to you.
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Re: Retroactive Sales Tax

#46 Post by AndrewH » September 9th, 2019, 6:29 am

Robert.A.Jr. wrote:
September 8th, 2019, 3:07 pm
No. I spoke with the auditor on my file. The Florida DOR has agents at the truck weighing stations on the major Florida arterial and they spot check contents. Over that three year period, I had a lot of in-state shipments, including large-scale art that is hard not to see given the odd box size. It would seem random but apparently works for them.
Wow - I think if you're on the DOR list from spot checks at weigh stations you should win the excessibe baller prize.
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Re: Retroactive Sales Tax

#47 Post by Robert.A.Jr. » September 9th, 2019, 6:46 am

AndrewH wrote:
September 9th, 2019, 6:29 am
Robert.A.Jr. wrote:
September 8th, 2019, 3:07 pm
No. I spoke with the auditor on my file. The Florida DOR has agents at the truck weighing stations on the major Florida arterial and they spot check contents. Over that three year period, I had a lot of in-state shipments, including large-scale art that is hard not to see given the odd box size. It would seem random but apparently works for them.
Wow - I think if you're on the DOR list from spot checks at weigh stations you should win the excessibe baller prize.
Ha. A rather ignominious award.

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Re: Retroactive Sales Tax

#48 Post by Brian G r a f s t r o m » September 9th, 2019, 7:11 am

John Morris wrote:
September 8th, 2019, 5:46 am


It's not a use tax the states are now collecting. It's sales tax on purchases from out of state, and the seller has to collect that. It's all because of the Wayfair Supreme Court decision last year, which reversed earlier decisions and allowed states to collect sales tax from businesses based elsewhere even if they don't have a physical presence in the state to which they are shipping (a requirement in the past). States have to enact laws to take advantage of this, however, ...

There's a pretty good discussion of the impact of the decision here:
https://www.theregreview.org/2018/07/24 ... -decision/
This is a great article. Thanks for posting, John. Right about now, I'm glad I never purchase wine from retailers outside my home state, a luxury that living in CA reasonably allows me.

Joe,
I'd pay the taxes.
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Re: Retroactive Sales Tax

#49 Post by Robert M yers » September 9th, 2019, 8:26 am

AndrewH wrote:
September 9th, 2019, 6:28 am
Robert M yers wrote:
September 8th, 2019, 7:59 pm
John Morris wrote:
September 8th, 2019, 7:47 pm
I didn't think states had in the past tried to collect sales tax on sales leaving that state. That's what made buying out of state so attractive, not just for wine.
They do now but seemingly only for wine, which for us could be a problem when each state starts staking it's claim. I’m all for paying fair tax, but don’t see how this one will be resolved once the receiving state realizes what’s going on.
I think it's well beyond wine at this point - most major retailers are now collecting the sales tax of the state to which the online order is being shipped. Prior to Wayfair states were not able to collect that tax (or at least couldn't enforce their tax rules against out of state shippers with no in-state presence). Now they can.

So, what you should be paying is your state's sales tax on any shipments, wine or otherwise, to you.
So your suggesting to pay the NY tax and then claim local taxes?
No other online order besides wine charges tax from the purchased state, it’s all from the delivered to state.

Or will the correct answer to the tax man be, no I paid taxes already in NY you see. I purchased those online and took delivery via proxy in NY when I purchased them, the disclaimer told me so?

I’ve yet to hear anybody tell me outright that we now need to pay double tax or the opposite which is I’m cleared of local tax responsibilities because I’ve paid my taxes via a virtual purchase in another state.

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Re: Retroactive Sales Tax

#50 Post by Rich Salsano » September 9th, 2019, 7:40 pm

You definitely do not owe double taxes. Most states offer reciprocity for taxes paid to another state.
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