One of the great benefits of buying gear online is the ability to buy cameras, expensive lenses, etc. and not have to pay sales tax (if ordered from out of state). That all appears to be changing now.
To most people, the idea of not paying sales tax when shopping online has been a sweet deal. Many folks don't even realize that you are supposed to pay a use tax, which was self-enforced basically. I'm sure you can guess how many online shoppers actually did this. The Supreme Court just ruled that online shoppers can be forced to pay sales tax. So, it looks like we are facing the end of the era of "saving" hundreds of dollars in tax on a single camera purchase. But legally speaking, we weren't supposed to just be pocketing the tax.
This is a big deal for those who buy lots of gear, as well as those like me, who switch platforms every month or so it seems. My feeling is that it will ultimately have some folks buying more used gear as opposed to buying new (whenever possible). That said, it shouldn't be as big a deal as it feels like. It feels like a kick to the gut, because it seems as if the prices just got raised on everything, but in reality, we were supposed to already be paying it anyway.
What do you think? Is this a huge deal? Have you been paying the use tax locally even for your online purchases?
Lead image by Crypto Head.
However much it hurts us, online retailers will feel it more.
I will just take a 10 minute drive to Delaware where they have no sales tax now and buy from Best Buy instead of B&H. They don’t have the big money items in stock but can order them, not as fast as B&H but I’ll save some money.
This is going to be a big deal for all the small camera stores struggling to hang on out there. They typically have the same prices on major camera gear that the big guys do, but lose so many sales to the no-sales-tax online stores. Now maybe they'll be considered again.
Well, I bought my last camera by the Internet from a brick and mortar store five years before I moved to the same city where that store is now my local store. The thing about Internet commerce is that anyone can play, so it's inherently egalitarian--anyone can play.
Moreover, as a professional I can't skip paying the Use Tax that every sales-taxing state requires because it's a simple thing for the state to audit my business equipment purchases.
Here where I'm from, the "local" camera store was smart enough to set up an online presence years ago. They already are competing with the big guys; and doing fairly well. However, this ruling has been a stake through their heart. They simply aren't big enough to absorb the costs of compliance like Amazon and the others. No doubt about it, although this ruling is being billed as a "win" for small retailers, it's actually not. It's a huge win for the big guys.
I don't understand your logic. I'm not sure about other manufacturer's but Nikon sets the price in the US so the internet retailers can't lower the cost to offset the taxes. Maybe that's possible with Canon, et. al.
You are aware that these retailers sell other things other than cameras, right? I mean, look at, say, B&H, for example.
I see your point but I remain unconvinced it helps the online retailers. We'll see, I'm sure.
I mean... if you are following the law and paying use tax every year, then your gear will cost the same regardless.
Just because you don't pay sales tax online doesn't meant you're *supposed* to not pay tax on it later.
Well we have lots of laws that have been ignored and unenforced for a long time by the ones who made the laws, so why would anyone think you have to pay sales tax for online purchases.
Like illegal immigration for example.
Or the emoluments clause.
Because your tax form tells you to every year when you file taxes....
Meh, I'll keep on making tax exempt business purchases.
I'm not as worried about buying as I am selling. Having to keep track of every tax scenario for each address so that I can collect the right tax on every sale and then distribute it yearly or whatever on the proper form to a myriad of entities definitely impacts selling product online. The state in the Supreme Court decision exempts those with sales under 100K, but I do not expect certain other states to be that generous.
I owned a retail business and always grumbled about the big online stores that I competed against had that advantage. While I like saving money, I've arrived at the point that I don't buy a lot of new stuff. I cheer for the small brick and mortar souls out there!
Fortunately, for a myriad of reasons, I live in The Lone Star State. A photographer took the sales tax issue all the way to our Supreme Court years ago and won. A photographer/cinematographer with a Texas Sales Tax number can buy virtually any equipment that is used in the production of their end product, without sales tax. The logic is, they are manufacturers of a product and it is taxed at the final point of sale, so the ingredients shouldn't be taxed along the way. Oddly, computers, hard drives, lenses, memory cards, lighting, all tax exempt , but camera cases are taxable.........I haven't got the slightest idea ......:)
It's because there's a whole host of people entrenched in all governments, local to the Feds, that have to justify their existence. They do so by creating arcane laws, fees and taxes. There's a reason why the federal tax law book is heavy enough to anchor a Nimitz class aircraft carrier.
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I'm not from the US. How can a tax be voluntary?
Believe me, is not. It’s just an area, where it is very hard for states to enforce due to the amount of paperwork and personal to track down evaders. So they do not bother. Buts it’s kind of an honesty policy.
I will now buy from my local camera store..they just couldn't compete on price when buying the big ticket items and they knew this. I would buy all my paper, bags, and little items but saving nearly 200 on a lens made B&H a discount store. I guess not anymore.
In the UK sales tax is paid at the point of purchas, It's called VAT or Value Added Tax and used to be at 17.5% but has been 20% for the last 10 years. If you're a business and you have over X amount of turnover then you can claim back the 20% on all business purchases at the end of the year which gets deducted from your end of year tax bill.
Same in France.
Same in Czech Republic, but 21%
It's pretty much the same model on all european union. Some differences here and there, but in the end it works the same way. So, same in Portugal 23% tax...corrupt motherf$(%$#"...
Anyone who is complaining about this from a consumer “cost” perspective is a scumbag. If you’re not paying taxes if a pothole destroys your tire or your house burns down because there’s no firefighter to come and help I have absolutely no sympathy. Taxes are how the government is able to protect the population and maintain public lands and systems.
If you want to have a discussion about how effective the use of the money they collect (or how the tax system needs a overhaul to simplify), well thats a completely different thing, but just because a retailer wasn’t required to COLLECT the tax from you before doesn’t mean it wasn’t owed.
I am a medium-sized business owner in California, with a substantial physical presence (factory) in one other state, distribution centers in 10 additional states, and a sales presence in the entire USA, Canada, and a significant presence in the international market. I do not dispute or disagree with your comment regarding personal/corporate responsibility as it relates to contributing one's fair share of support to the maintenance of a functioning society. Key is the word "fair."
In this state, minus fancy accounting and corporate shenanigans, we are paying better than 50% combined federal and state statutory corporate tax (including as well our local/municipal taxes and fees). These are the real numbers, not muddled by government doublespeak and loop-holery. Note as well that our government, at all levels, has gotten quite experienced at hiding taxes in the form of fees; none of which have the possibility of stakeholder (voter) input.
So I don't think the discussion regarding the tax system is a separate one... I think it is the issue. Leveling the playing field for business on a one-line item issue is not correcting the matter that is causing small business, mom-and-pop business, and main street business to struggle and fail.
I don't begrudge government entities tax revenue when stated in a vacuum. Unfortunately, these entities treat the taxpayers as interest free credit cards. I've seen way too many "stimulus plans" that stimulate cronies and not the guy like Peter that is trying his best to keep a business from going belly up. He provides jobs as a side note to his ultimate goal of creating a successful business that keeps his employees working and happy.
People that take that sort of monetary risk are unsung heroes in my book. You don't start a business with keeping the government in money, you start a business to make a profit. I'm an unapologetic capitalist because I know it's the best way for anyone that has the mindset and the work ethic to succeed. I love the man/woman that grows a business to a point that he/she can buy a Gulfstream 650. After all, Gulfstream pays its employees good money to design, build, and service those bizjets.
It's called incentive and it is the reason for businesses to spring up. We have those in the world that believe these people shouldn't be allowed to flourish, so they find was to bludgeon them through tax codes, laws, and user fees. And that ends my capitalist screed for 22 June, 2018.
In Canada, businesses who charge tax are rebated the federal portion of the sales tax against their payable tax, so "saving" the tax actually costs us money by artificially raising the collected tax we need to pay into the system.
Also, as a business who charges sales tax, when we sell our equipment as "used" we have to charge tax on the sale, since it was rebated at the time of the original purchase, so neither of the scenarios in the article will apply to photographer in Canada who operates as a registered business.
Only the photographers who earn *below* the amount needed before being required to collect sales tax ($30K in sales in a rolling 12 month period) would benefit from buying online and "saving" the tax. Perpetuating the lowest priced "pro" photographers justifying their low low prices.
This is a step towards leveling the playing field for Mom and pop retailers everywhere! Can’t tell you how many times it’s easier to wait two days for something because you can get it tax free. Of course it sucks that the way to solve this is even more taxation, but I see this helping retailers who lose out in their brick and mortar locations.
Does not B&H, Adorama and the rest have brick 'n mortar presences? Adding a tax won't help those mom and pops that can't offer what I'm really after when I shop online: convenience and inventory. Does that shoe store down the block carry that specific shoe I'm looking for? Will that mom 'n pop offer the same return policy? There's a lot more to shopping online than just avoiding a tax.
While they do have their store fronts, the vast majority of their income is internet sales. You're right about more than one reason to buy from a specific store, but this new tax law has at least put a new plus in favor of the locals.
I live in New Jersey, so this is all moot to me.
I think the bigger story here isn't about camera stores but about small business and photographers. This new law could require that all photographers collect and submit sales tax to 1000s of municipalities across the USA on every photoshoot, print, album, and other product they sell.
At the moment many photographers only have to collect and pay taxes on tangible products shipped within their own state but this is setting up to be a real nightmare for commercial and wedding photographers who have clients nation wide.
This ^
True, this could be enough of a nightmare that my speculation is many wouldn't do it... when that stuff takes more time than your actual job you must ask yourself if it's worth it.
I work for a small pro video retailer. This is going to be a huge boon for us. We fight tooth and nail to win sales from big online retailers, mostly B&H. In our state we (as residents) have always been required to report our online purchases to the state and remit the appropriate sales tax, but few do that. Even massive corporate entities have been known to go the B&H route and then get audited and face severe penalties. The customers decision to go B&H has always come down to taxes, because we match B&H prices. I for one am looking forward to seeing this advantage for B&H disappear.
Regardless of how this affects us as individuals, it's a shame that so many brick & mortar camera stores went out of business in recent years because they couldn't compete with "taxless" online shopping outlets. Atlanta used to have one of the best professional camera stores. Even though I did some of my shopping online, I was still willing to spend more every once in a while in order to support local business. There was something about being able to hold a camera or a lens in your hands before you bought it, or take a bunch of gear in to see how it would all fit in the bag you were thinking about buying. Unfortunately, too many people would come in for a "test drive" and then buy on line to be able to stay afloat.
Maybe I’m a moron, I have always paid it at years end. Guess I won’t feel it