This is an interesting dispute. Anyone want to go in on a logistics service To/From California/Arizona to swap Rock Auto parts for non-compliant parts for California? Sorry if this is a repost.
This is an interesting dispute. Anyone want to go in on a logistics service To/From California/Arizona to swap Rock Auto parts for non-compliant parts for California? Sorry if this is a repost.
DirtyBird222 said:Anyone want to go in on a logistics service To/From California/Arizona to swap Rock Auto parts for non-compliant parts for California?
Based on how the article explains how taxes are collected in Arizona?
Berk no, that sounds like a massive clusterberk
Mr_Asa said:DirtyBird222 said:Anyone want to go in on a logistics service To/From California/Arizona to swap Rock Auto parts for non-compliant parts for California?
Based on how the article explains how taxes are collected in Arizona?
Berk no, that sounds like a massive clusterberk
I'm thinking more of the Smokey and the Bandit style logistics.
Ahh. Running from the revenuers, yeah, that's always acceptable
Mr_Asa said:Ahh. Running from the revenuers, yeah, that's always acceptable
Yes, it is, and for legal reasons, only in jest.
The part that I liked was that there IS a web service for determining which tax district a given address is in... but it access to it is apparently blocked due to Arizona state security.
Yeah, I'd walk away too.
Man...that article reads like VCR instructions. I understand the gist of it but it could have been summarized as:
Arizona taxes complicated.
Costs greater than profits.
KTHXBAI.
Sounds like Arizona got what they voted for.
It happens.
If the "suppliers" are running under a sperate Tax ID number they are not part of Rockauto......period.
Sadly it would cost Rockauto more money in attorney fees than it's worth to take it to a higher court.
The last two shipments I got form FCP were shipped out of Arizona. I wonder if they are going to run into issues. Maybe Arizona doesn't want parts warehouses in their state?
It's not that Arizona doesn't want warehouses, it's that they want their mitts everywhere. It is not a net gain for the state.
I say this speaking as an Arizona resident and business owner.
Tom1200 said:If the "suppliers" are running under a sperate Tax ID number they are not part of Rockauto......period.
Sadly it would cost Rockauto more money in attorney fees than it's worth to take it to a higher court.
The argument against that is "they're committing tax fraud"
Gotta have more than that to prove it, especially in today's world of shell corporations and whatnot.
The article claims that ADOR is losing a revenue stream. I disagree. The vast majority of those parts will still be bought, and often at a higher price now... Items purchased at a higher price increase the amount of sales tax the state gets. This could easily result in a net increase in ADOR revenue, which I'm betting is the 'math' this redefinition of "in-state presence" was based on in the first place.
However, I'd think RA will also be watching (searching?) for examples of the state electing not to go after other out of state companies similarly using drop-shipping suppliers in the state, and using that to come back and argue selective enforcement.
Mr_Asa said:Tom1200 said:If the "suppliers" are running under a sperate Tax ID number they are not part of Rockauto......period.
Sadly it would cost Rockauto more money in attorney fees than it's worth to take it to a higher court.
The argument against that is "they're committing tax fraud"
Gotta have more than that to prove it, especially in today's world of shell corporations and whatnot.
No Rock Auto isn't committing tax fraud
The suppliers in Arizona would be doing that if it was determined they are part of Rockauto; which at this point is not the case until proven otherwise.
In reply to Tom1200 :
Per the court ruling, their providing the outside suppliers (located in Arizona) with Rock Auto magnets to place in orders means that Rock Auto is themselves operating out of Arizona.
So, this means that if, say, GRM were to give away swag at a track event in Arizona, they'd be considered an Arizona based business?
The key is that RA is required to handle the tax collection and submit that, the problem is that there is no streamlined way to navigate the labyrinthine sales tax structure (or whatever they call it in Arizona) so if they guess it wrong, they are on the hook for that mistake, and their profit margins are razor thin so having to eat the tax costs would erase all profit and more.
Also, they were ordered to pay for taxes uncollected between 2013 and 2019. Ouch.
In reply to Pete. (l33t FS) :
For the record I would do the same thing Rockauto is doing.
The whole magnet thing is just such a thin argument. Of course taking it to the next level court would cost more than they could likely ever recoup.
So this is why I don't get RockAuto magnets anymore?
Tom1200 said:If the "suppliers" are running under a sperate Tax ID number they are not part of Rockauto......period.
Sadly it would cost Rockauto more money in attorney fees than it's worth to take it to a higher court.
If Arizona wants to collect sales tax they will twist that arguement into legal knots, and then collect the tax.
I think a lot of folks misunderstood the article. AZ has a system in place to provide retailers with tax info. RA is stating they don't want to go to the trouble/expense to meet the security requirements to access that system. The argument over 'having a presence' in a state is a lost battle at this point. As a libertarian, I don't like it, but I have to pay sales tax to out of state private sellers for used stuff on eBay all the time. It's the world we live in today, and it's not going to change.
FWIW, I've been buying parts from RA for years, and they've always managed to charge me the proper amount of sales tax... if they failed to then pay that tax on to AZ, that's on them. Smells a little fishy to me.
Appleseed said:So this is why I don't get RockAuto magnets anymore?
What about RA tape?
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