Need help in a hurry - Question about Blue Nile and upgrade tax

[yssie]

This. What I do in Idaho has no bearing on what I must do in California. I know that I recently did an upgrade sale in a state for which I collect taxes, and my software, which calculates all of the taxes in all of the states that I do collect taxes for, collected tax only on the upgrade value.

I cannot answer any questions about what other states do, which is why I pay each month for software to make sure I am doing it correctly.

Wink

I used to work for a company that provided financial services software to automotive dealerships - my team wrote the programme that did state and federal tax calculations on vehicle sales and leases.

In that industry, at least, even the software developers aren’t 100% on how taxes should be calculated! Tax law is insanely complicated in some states, and documentation is open to interpretation, and different authorities do interpret it differently. The California DMV has a tax calculator that attempts to parse CA regulations - and states, when it outputs its result, that they are not conclusive and may differ from “true amount owed” - where true amount owed is judged by a human professional like @hypermom!

Common sense would certainly suggest that an upgrade is effectively a return of the existing stone and a purchase of a new stone, and that double-taxing the original payment just isn’t fair. But then I read this... and sigh.

Just to illustrate check your common sense at the door. It’s all about maximizing receipts not fairness.

 

[MissGotRocks]

And again, most states probably don't have a problem doing this because jewelry is a luxury item. Taxing the folks that are perceived to have more money for luxuries is just. . . well, ok. . . !

In a common sense way, it makes no sense. However, refer to paragraph above which negates common sense in favor of more money!

 

[whitewave]

Also, I live outside city limits, so I don’t pay the full tax percent, I have a letter from the tax assessor to verify this, because it the beginning it was a royal pain trying to explain this to people. It’s about a percent less, which on luxury items adds up!

 

[MissGotRocks]

Also, I live outside city limits, so I don’t pay the full tax percent, I have a letter from the tax assessor to verify this, because it the beginning it was a royal pain trying to explain this to people. It’s about a percent less, which on luxury items adds up!

And that applies to your state's sales tax? Wow!

 

[whitewave]

And that applies to your state's sales tax? Wow!

. Well, it applies to the city tax part.

The state tax is 4.45% and the parish sales tax is added for a total of about nearly 9.25%

Louisiana has super stupid tax laws.

 

[the_mother_thing]

Also, I live outside city limits, so I don’t pay the full tax percent, I have a letter from the tax assessor to verify this, because it the beginning it was a royal pain trying to explain this to people. It’s about a percent less, which on luxury items adds up!

I think these situations are more common than people know, and just not widely publicized for insurance the tax wallets stay flush. It really takes citizens researching their tax obligations to understand them.

 

[denverappraiser]

Ask your state tax authority. That's who is levying the tax, not BN.

You almost certainly owed tax on the original sale. Every state with a sales tax also has an identical use tax for exactly the situation where merchants don't (and can't) collect the tax. This will be explained on the taxman's website. Whether or not you paid has nothing to do with the current transaction.

At least in Colorado, they view this as two different transactions. You're selling one thing and you're buying a different one. It doesn't matter that they're done with the same party and at the same time. Consumers selling things are not entitled to a refund of taxes paid (or not) when they originally bought the item.

 

[cflutist]

From CFTFA

We collect sales tax in CA for our EBay teddy bear store, don't ask, lol

 

[hypermom]

I learned through researching this that a small number of states charge sales tax on the full value of a new car even if you have a trade in.
That sure doesn’t seem fair!

 

[BMI]

You're selling one thing and you're buying a different one. It doesn't matter that they're done with the same party and at the same time. Consumers selling things are not entitled to a refund of taxes paid (or not) when they originally bought the item.

And let's not forget that when the jeweler sells that same returned diamond again to another customer, that person will pay sales tax too. It would seem that upgrade policies work out nicely for state sales tax revenue!

I learned through researching this that a small number of states charge sales tax on the full value of a new car even if you have a trade in.
That sure doesn’t seem fair!

I'll be shocked if CA isn't one of the few!

 

[MissGotRocks]

Sorry to threadjack @mrs-b but hope you are feeling OK today and resting! Thinking of you!

 

[mrs-b]

Well that was all most illuminating....



I'm paying the full MA tax and have given up trying to understand the process. I do understand the principles - I'm not stupid - but there are a LOT of inconsistencies in this - and the idea that multiple people could end up paying sales tax to the same state for the same item sold by the same vendor is just a bit annoying to me. But I am not on a moral crusade here - just a search for a nice diamond!

@rainydaze - never fear - I'm buying that gorgeous stone!

And I'm going to put it in that upgraded floral setting. But I have to say, part of me REALLY just wants to put it in a lovely solitaire setting! What a gorgeous gem!

(...and of course - part of me wants to put it in a 3 stone. Because 3 stones are my jam!)

 

[mrs-b]

Sorry to threadjack @mrs-b but hope you are feeling OK today and resting! Thinking of you!

Definitely resting, @MissGotRocks - and plenty sore! They fill your abdominal cavity with air for this surgery, and it hurts far more than any of the incisions! It's not like a colonoscopy, where you can just toot it all out - this is your actual abdominal cavity, so you have to wait for your body to re-absorb the air, which, I have it on good authority, takes 3-4 days. Oh yay.

 

[Asscherhalo_lover]

Definitely resting, @MissGotRocks - and plenty sore! They fill your abdominal cavity with air for this surgery, and it hurts far more than any of the incisions! It's not like a colonoscopy, where you can just toot it all out - this is your actual abdominal cavity, so you have to wait for your body to re-absorb the air, which, I have it on good authority, takes 3-4 days. Oh yay.

I've been there and done that a few times, it's so uncomfortable! Hugs

 

[MissGotRocks]

Definitely resting, @MissGotRocks - and plenty sore! They fill your abdominal cavity with air for this surgery, and it hurts far more than any of the incisions! It's not like a colonoscopy, where you can just toot it all out - this is your actual abdominal cavity, so you have to wait for your body to re-absorb the air, which, I have it on good authority, takes 3-4 days. Oh yay.

That's what they do for a tubal ligation - I didn't have one but have heard it is quite uncomfortable!

At least that part is behind you now so no more dreading it. Now we will wait to hear the results. Hope you are able to rest comfortably and feel better soon!

 

[rainydaze]

Yay! I'm so happy to hear that! That diamond will be a treat to stare at no matter which setting you put it in, but I think you have the right idea!

On a more personal note, I am sad about what you are facing with your health. While I'm not overly vocal here, I am thinking of you and hoping that you will be able to share good news with us in due time. And that during the process of getting there, the powers that be show some mercy.

 

[PepperT]

This thread has been quiet for a few days, but has put some questions in my head. Could mrs=b be being taxed for the whole new purchase price because it is now going to a different state than the first purchase did, and so in this case, the new state (MA) can assess a tax on the whole purchase because the state sees this as a whole new purchase entering their state and could care less about it being an upgrade with prior sales tax being paid on a portion of the amount since those taxes paid prior went to a different state? (also not sure if MA is like CA on taxing entire new diamond on upgrade and not additional upgrade amount only?) From what I can gather, if she had had it sent to an address in CA she would have been taxed for the full new diamond price anyway as I have been told that California is one of a few states that taxes the entire amount of the new diamond on an upgrade. Seems like in states like CA you would not want to frequently upgrade because you end up with such a tax burden. Does anyone know what other states are like CA in taxing on the whole new diamond price in an upgrade situation? One vendor, not on PS, told me they know of three states who do this, and CA was one of them. Not sure of the other states? Does anyone know?

 

[MissGotRocks]

This thread has been quiet for a few days, but has put some questions in my head. Could mrs=b be being taxed for the whole new purchase price because it is now going to a different state than the first purchase did, and so in this case, the new state (MA) can assess a tax on the whole purchase because the state sees this as a whole new purchase entering their state and could care less about it being an upgrade with prior sales tax being paid on a portion of the amount since those taxes paid prior went to a different state? (also not sure if MA is like CA on taxing entire new diamond on upgrade and not additional upgrade amount only?) From what I can gather, if she had had it sent to an address in CA she would have been taxed for the full new diamond price anyway as I have been told that California is one of a few states that taxes the entire amount of the new diamond on an upgrade. Seems like in states like CA you would not want to frequently upgrade because you end up with such a tax burden. Does anyone know what other states are like CA in taxing on the whole new diamond price in an upgrade situation? One vendor, not on PS, told me they know of three states who do this, and CA was one of them. Not sure of the other states? Does anyone know?

In my state, it wouldn't matter. You pay tax on the entire amount at the time of purchase - resident or not. I couldn't believe it either but checked with the state tax office and they confirmed that it was correct. Didn't matter that you had paid tax on the first stone. Once you traded it in, you owed tax on the entire amount of the new stone. Grossly unfair in my opinion but that's the way the law reads. I assume it is because it is considered a luxury item although I didn't confirm that with them.