Chicago Music Exchange and online sales tax

Discussion in 'Guitars in General' started by crashintou, May 12, 2019.

  1. crashintou

    crashintou Senior Member

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    I just went to order a guitar from CME and found that they are now charging sales tax to my state. Last time I ordered from them at the end of March there was not any sales tax. If you look at their sales tax policy, it shows something like 26 states they are now charging sales tax to. I know this changed for certain states staring April 1- but it didn't in mine.

    I can't really make sense of it because my state has not mandated that online retailers collect sales tax yet- we have to self report and mail a check to the state quarterly. What's weird, is that they are not charging the state amount for out of state online sales tax but instead they are charging the sales tax amount for the highest sales tax county which has added an extra 2.5% over the state amount. I suppose they are doing the reporting for everyone and cutting a check to the state- however how can they charge the extra 2.5% to everyone, including those that do not live in the one county with the extra 2.5% of tax? I really don't understand their new policy now.
     
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  2. Sp8ctre

    Sp8ctre Supporting Member

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    It's happening everywhere...Sweetwater is no longer a tax free site either...
     
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  3. crashintou

    crashintou Senior Member

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    Sweetwater still doesn't charge sales tax for my state- I just checked
     
  4. Rob303

    Rob303 Member

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    CME recently charged me too much but refunded the overage before I even received the product. I’m guessing they’re still working out the bugs and have a human auditing the transactions in the meantime.
     
  5. Sp8ctre

    Sp8ctre Supporting Member

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    Maybe so, but the online No Tax is coming to an end...

    While I wish it wasn't I'm kind of glad it is. I can shop around more and not just buy at a certain store due to No Tax!
     
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  6. crashintou

    crashintou Senior Member

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    you were always supposed to self report it anyway- I was more specifically referring to CME charging sales tax for the highest rate county of the state regardless of living in that county
     
  7. wox

    wox Supporting Member

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    Over a year ago, the Supreme Court ruled that businesses over a certain size (over $100k/yr or over 200 transactions in a particular state) must collect sales tax in that state.

    Takes a while for rulings to become functional law, so it's all starting to shake out now, and a lot of retailers are dealing with this right now, but it's definitely the way of the future.
     
  8. Strat-cat

    Strat-cat Member

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    This is probably a good thing, allowing local folks to compete, even though the discounts are drying up. Good to give local retailers a chance without starting out 7% behind the eight ball, right?

    I still go with CME anytime I don’t buy local, those guys rock.
     
  9. mrpinter

    mrpinter Supporting Member

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    My guess is it will be hard to enforce the new law. No tax yet in CA on orders from giant camera and electronics retailer Adorama.
     
  10. Sp8ctre

    Sp8ctre Supporting Member

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    I don't think it will be hard to enforce. It was hard to enforce when they put the onus on the individual buyers to be honest and pay the sales tax. But shifting that responsibilty to the big sellers it will be easy. They will just fine them for non-compliance. Sweetwater has already started taxing California. Others are soon to follow...IMHO.
     
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  11. BluntForceTrauma

    BluntForceTrauma Member

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    Looks like my online buying days are about over. At least for any substantial purchases.
     
  12. Benz2112

    Benz2112 Supporting Member

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    I think OP's issue is with CME's automated system charging too much sales tax. I would imagine calling in your order would probably square this away, since they would work up an invoice for you. I would suggest this anyway.
     
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  13. -Hawk-

    -Hawk- Member

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    I live in IL, so I was surprised to see my last CME order come in about 4% higher than what I’d normally pay in sales tax at a store. I like them for many reasons, but that was enough to push me to Sweetwater for larger online purchases. They charge tax but at least it’s accurate.
     
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  14. DiPa

    DiPa Constant GAS Silver Supporting Member

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    Yeah used to be a huge advantage, so now shopping locally will pick up once again...
     
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  15. C-4

    C-4 Member

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    I just ordered a new Custom Shop Gibson Les Paul over the weekend from GC, and they have always charged sales tax. However, it is the first time I have bought a guitar from them in awhile. They just had a model I happened to like, which only they and MF carried.

    I have (hopefully) stopped buying from SW unless I find no other alternative. So far, that has worked out well for me.

    Luckily, I bought recently, a new amp, am having a new cab built, got my new cables, and didn't have to pay sales tax. I just missed it being applied.

    However, it is the way of the world, and with so many changes taking place as fast as they do, I have learned to accept change, and just go with it.
     
    DiPa likes this.
  16. crashintou

    crashintou Senior Member

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    yes that was my concern- they are overcharging sales tax for all but one county in my very large state.
     
  17. chrisjnyc

    chrisjnyc Supporting Member

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    Depends on what state you live in... but avoiding sales tax is pretty much a thing of the past.
     
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  18. Cam1936

    Cam1936 Member

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    New system, isn't it reasonable to give to time to work out the kinks? I'm sure a phone call would sort it out.
     
    Ryno1331 likes this.
  19. wox

    wox Supporting Member

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    Adorama sales tax is coming. B&H just started charging sales tax to all states, and also rolled out their "Payboo" credit card which instantly reimburses you any sales tax on B&H purchases made with the card.

    This is related to my area of work, and which retailers benefit from this is really murky, but as usual, this law is probably not a victory for the little guys.

    It's not nearly as simple as:
    • There's an 8% tax in NY state
    • Add 8% to NY orders
    • Pay 8% to NY state

    There are something like 15,000 different tax jurisdictions in the US - state taxes, county taxes, city or municipality taxes, ZIP codes, and some cities or states have drawn weird block-by-block tax zones for certain items.

    I was just dealing with a streaming media tax in Chicago that is so granular you can't even go by zip code, because it's only applied to certain blocks within certain zip codes.

    Further, there are really byzantine and senseless per-product tax rates. In the same tax jurisdiction, you might see still water taxed at 6%, while sparkling is 8.275%, and flavored water is not taxed at all.

    It's now on the retailer to know how much to tax who, and who to report these collections to. There's really no such thing as a purely brick & mortar store anymore, so the new law is likely to drive smaller business offline, rather than forcing them to spend money on compliance. This won't be sustainable for some.

    Meanwhile, Amazon will have no problem dealing with new regulation.
     
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  20. xjojox

    xjojox Tardis-dwelling wanker Gold Supporting Member

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    If they have to charge tax for a state with varying rates, it only makes sense that they charge the highest rate for the state. They can’t go county by county (yet LOL). Having said that, varying tax rates are due to individual municipalities charging different rates for certain things which are above and beyond a common statewide rate. I wonder if the fed law is explicit about those municipal taxes, or if the obligation is only for the common statewide rate?
     

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