Anyone get hit with CA "Use Tax" retroactively?

General art-related discussion.
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phearloathing
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Tue Aug 04, 2015 9:05 pm

Just got a letter from state saying I owe for a 2012 and 2014 purchase. I basically owe $500 between the two purchases.

It also tells me to list the value and items I have imported into CA.... Which I then will have to pay tax on.

This could get incredibly expensive and I am a bit concerned on how to approach this....

Any other experiences?
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slunkey
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Tue Aug 04, 2015 9:32 pm

Just read into this, and didn't even know it was a thing. Its not limited to CA either, it goes for any state that has sales tax. It includes purchases made online from a state not in your own, purchases made from people who can not collect sales tax in your state (craigslist ect), are some of the things that would require 'Use Tax'. But I read not many people pay it, because they are unaware of it. I'll just wait until I get a letter.
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phearloathing
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Tue Aug 04, 2015 9:38 pm

Based on the items they have record of they tracked it through fedex customs.

hmmmmmm.

Guess I'll start a FS thread
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elduderino619
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Tue Aug 04, 2015 9:51 pm

How do they know the value? They look up your collection and check the 6 month average on this site and send you a bill? I don't think they go through private sales records let alone anything from ebay.
IWish
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Tue Aug 04, 2015 9:55 pm

I recall another member posting about getting a letter regarding use tax. If I recall correctly, the items were also tracked through purchases through customs. Think it was gorkie, but could be wrong about that.
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phearloathing
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Tue Aug 04, 2015 9:56 pm

elduderino619 wrote:How do they know the value? They look up your collection and check the 6 month average on this site and send you a bill? I don't think they go through private sales records let alone anything from ebay.
when sellers from overseas declare value when sending to the US. On each of these I had received a bill from fedex for import tax.
IWish
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Tue Aug 04, 2015 10:33 pm

This isn't anything to do with your situation. This just got me thinking about all the private commission/sales? I wonder how the tax money is handled through paypal accounts (income/revenue-sales tax collection, etc.) Could this prove to be a major thing for those heading-up the commissions? Will this come back and bite them? Just wondering...
cktbreaker
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Tue Aug 04, 2015 10:35 pm

It was prob me talking about the wonderful CA franchise tax board. I only have problems with fed-ex, they report everything. CA franchise tax board sends me 'use tax' letters every year about some import that I "might" owe them money on. I also have rental properties in another state and every year they want to know where I made the money to pay the loans. Even though It's all accounted for on my fed taxes which of course I have to send a copy of to the franchise board with state tax filing. They can't seem to get the idea that taxes from income from another state are owed to that state and not CA. So every year I write them a letter explaining the situation. I now have the letter saved on the comp and I just send them the same letter year after year.

Last year I told them the import I received was damaged and had to be sent back, haven't heard anything about it since.

Crazy thing is it's like a game, they say, 'we know you owe us money, because we have the paperwork from fed-ex, but were not going to tell you how much you owe. So figure it out and send us the money.

So it's cost of imports / your county tax rate. In my county the rate is 7.75%. You might have to figure out the late payment penalty as well. I am sure if you don't you will get another letter.

I bought an OG from England, had to send about $600 to the franchise board, haven't bought another OG out of country since then

We actually owe them for any purchases that enter the state.
Last edited by cktbreaker on Tue Aug 04, 2015 10:40 pm, edited 1 time in total.
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sidewaysscott
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Tue Aug 04, 2015 10:40 pm

push back and tell them to prove it.
pay via paypal, use credit card,file dispute at the 20 day mark if suspicious. don't deal with noobs. don't trade with noobs. request feedback ahead of time. there are lots of good people 'round here.
IWish
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Tue Aug 04, 2015 10:47 pm

cktbreaker wrote:We actually owe them for any purchases that enter the state.
Yes.

Unless you are a legit business (a gallery) and are buying for "resale". Then I believe you can claim sales tax exemption, but will need to provide a state sales tax exemption certificate (with your state tax number) to the vendor at the time of purchase.
Last edited by IWish on Tue Aug 04, 2015 10:47 pm, edited 1 time in total.
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phearloathing
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Tue Aug 04, 2015 10:47 pm

I hate to make to many waves since I may have forgot to account for any pieces of art I have sold. Part of me wants to just pay it.

cktbeaker - do you pay these when the letters come? Am I suppose to pay interest?



hmm not sure what to do here...
cktbreaker
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Tue Aug 04, 2015 11:00 pm

Phear , I got the letter from the franchise board about this time last year. I sent the letter to them right away. They shake us down for taxes meanwhile the list of millionaires/billionaires with unpaid taxes carries on year after year, with the same names on the list.

Maybe split it, say you sent one back and pay the tax on the other or hell go with Sideways idea, play dumb and tell them to send you a bill or prove it...

I have spoken with other high price art buyers who have never had a letter from the franchise board, seems when you get on their radar you can't get off, I am sorry to say. Welcome to the use tax club!

Hope they don't find out about your MB piece.
Last edited by cktbreaker on Tue Aug 04, 2015 11:03 pm, edited 1 time in total.
Ifightfortheusers
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Tue Aug 04, 2015 11:03 pm

phearloathing wrote:
elduderino619 wrote:How do they know the value? They look up your collection and check the 6 month average on this site and send you a bill? I don't think they go through private sales records let alone anything from ebay.
when sellers from overseas declare value when sending to the US. On each of these I had received a bill from fedex for import tax.

So hypothetically a piece is a 1000 but reported as being worth 50....They only know the 50 value?
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phearloathing
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Tue Aug 04, 2015 11:08 pm

cktbreaker wrote:Phear , I got the letter from the franchise board about this time last year. I sent the letter to them right away. They shake us down for taxes meanwhile the list of millionaires/billionaires with unpaid taxes carries on year after year, with the same names on the list.

Maybe split it, say you sent one back and pay the tax on the other or hell go with Sideways idea, play dumb and tell them to send you a bill or prove it...

I have spoken with other high price art buyers who have never had a letter from the franchise board, seems when you get on their radar you can't get off, I am sorry to say. Welcome to the use tax club!

Hope they don't find out about your MB piece.

They did find out about my MB piece. That and the OS Gemeos Other Side are the two items they dinged me for.

Fortunately, the import price on the MB was marginal.
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phearloathing
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Tue Aug 04, 2015 11:14 pm

I read the letter a bit more carefully and it basically says to pay in 60 days OR i may get a notice of determination (billing).
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