K.C.Dean
Ultimate Member
I purchased a receiver from Tactical Inovations. I arranged it to go to a local FFL here in southern Maryland. When I went to fill out the paper work I was informed that I had to pay $21.00 tax for the receiver I purchased on the internet in another state. Is that legal? This was my first internet purchase. Please comment and let me know.
I want to wait untill I get my receiver then I will post who it was. Believe me I will let everyone who sees this thread know who it is. let me say there is a reason why this thread is in the southern maryland category.
When I started this thread I just wanted to know if it was common practice or what the legalities were. I had no intentions of bashing AG&A. After seeing what Mark has gone through with the comptroller I don't blame him for charging the tax. I am sure nobody wants to get audited. After Mark posted the letter from Comptroller I did some research. I'm putting the letter on this post and I am going to try and explain what I've learned.
The letter reads, I understand your confusion. I should have explained the definition of a vendor. As I explained to you previously you are acting as the vendor's agent bydelivering his goods to the buyer in Maryland. You are acting as the vendor's agent whether or not it was your intent to do so. The out-of-state seller is eaqually responsible for the tax. If the vendor is located in Maryland we would pursue the Maryland vendor. If the vendor is not located in Maryland, but his agent is, we pursue the agent. The reason 11-701 was enacted with its wording is to make sure that the tax is legally paid for goods transferred in Maryland by out-of-state vendors. The definition of the vendor is defined in Maryland Tax General Article- Section 11-101(o). You clearly meet that definition.
I encourge everyone to google Bella Hess V Illinois and Quill V N. Dakota. I am not a lawyer but i think its very clear how the Supreme Court ruled in both cases. First you have the Interstate Commerce clause and the Due Process Clause. In Bella Hess case it was ruled that if the only connection between the customer and the seller is by mail and common carrier then the state has no right to inforce a company to pay tax to the state where the items will be shipped to. In the letter the comptroller states that the out -of -state seller is equally responsible for the tax. He does not meet the minimum requirement. He would have to have a physical presence. I don't see how the FFL is acting as an agent because the only connection between them is through E-mail and a common carrier delivering the product. Ther is no physical connection. Since I purchased the item it belongs to me and not the seller.
With the Commerce Clause Congress controls commerce both foreign and between the states. They ruled that if each state made companies to withhold taxes that it would be such a burdon that it would interupt the free flow of goods between the states. the commerce clause also has a requirement that a company would have to have a substantial economic presence to meet "a Constitutionally sufficient nexus to justify the imposition to collect the use tax". It is obvious that in the case of a couple guns from a company doesn't meet the requirement not even close.
The United State Senate will probably pass a bill very soon that will allow states to require internet companies to pay tax for goods entering into their state. The sufficient nexus is set at $1,000,000 annually. I hope this helps and I should have done the research to start with. It is my opinion that it's the buyers responsibility to pay the tax.
I want to wait untill I get my receiver then I will post who it was. Believe me I will let everyone who sees this thread know who it is. let me say there is a reason why this thread is in the southern maryland category.
When I started this thread I just wanted to know if it was common practice or what the legalities were. I had no intentions of bashing AG&A. After seeing what Mark has gone through with the comptroller I don't blame him for charging the tax. I am sure nobody wants to get audited. After Mark posted the letter from Comptroller I did some research. I'm putting the letter on this post and I am going to try and explain what I've learned.
The letter reads, I understand your confusion. I should have explained the definition of a vendor. As I explained to you previously you are acting as the vendor's agent bydelivering his goods to the buyer in Maryland. You are acting as the vendor's agent whether or not it was your intent to do so. The out-of-state seller is eaqually responsible for the tax. If the vendor is located in Maryland we would pursue the Maryland vendor. If the vendor is not located in Maryland, but his agent is, we pursue the agent. The reason 11-701 was enacted with its wording is to make sure that the tax is legally paid for goods transferred in Maryland by out-of-state vendors. The definition of the vendor is defined in Maryland Tax General Article- Section 11-101(o). You clearly meet that definition.
I encourge everyone to google Bella Hess V Illinois and Quill V N. Dakota. I am not a lawyer but i think its very clear how the Supreme Court ruled in both cases. First you have the Interstate Commerce clause and the Due Process Clause. In Bella Hess case it was ruled that if the only connection between the customer and the seller is by mail and common carrier then the state has no right to inforce a company to pay tax to the state where the items will be shipped to. In the letter the comptroller states that the out -of -state seller is equally responsible for the tax. He does not meet the minimum requirement. He would have to have a physical presence. I don't see how the FFL is acting as an agent because the only connection between them is through E-mail and a common carrier delivering the product. Ther is no physical connection. Since I purchased the item it belongs to me and not the seller.
With the Commerce Clause Congress controls commerce both foreign and between the states. They ruled that if each state made companies to withhold taxes that it would be such a burdon that it would interupt the free flow of goods between the states. the commerce clause also has a requirement that a company would have to have a substantial economic presence to meet "a Constitutionally sufficient nexus to justify the imposition to collect the use tax". It is obvious that in the case of a couple guns from a company doesn't meet the requirement not even close.
The United State Senate will probably pass a bill very soon that will allow states to require internet companies to pay tax for goods entering into their state. The sufficient nexus is set at $1,000,000 annually. I hope this helps and I should have done the research to start with. It is my opinion that it's the buyers responsibility to pay the tax.
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I'm willing to be the state NEVER SEES THAT "tax"
