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  • tomballpa

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    Supreme Court rules states can collect sales tax for online purchases nationwide

    http://www.foxnews.com/politics/201...ales-tax-for-online-purchases-nationwide.html

    I'm interested to hear everyone's views on this.

    Its gonna hurt me just like its gonna hurt everyone, but as a states rights supporter, I'm obliged to agree.

    Thoughts?

    Sent from my SM-G950U using Tapatalk
    As a retailer I welcome it. But note, it is State Sales Tax, not local sales tax. So the State of Texas collects 6.5% whereas locally our rate is 8.25%. So it still gives online a little help, but again the playing field will be leveled for those of us that maintain storefronts, inventory, etc.
     

    Southpaw

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    As a retailer I welcome it. But note, it is State Sales Tax, not local sales tax. So the State of Texas collects 6.5% whereas locally our rate is 8.25%. So it still gives online a little help, but again the playing field will be leveled for those of us that maintain storefronts, inventory, etc.

    Feel free to correct me if Im wrong, but I don't see how it levels the field? Assuming you do most of your sales in one state compared to a business that does business in all 50. You will be required to file and comply to one state when they would be required to do the same x45 or so.
    The effect on you is minimal while it would be quite the opposite for the other. For many possibly devestating.
     

    MTA

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    Fannin
    nobel-laureate-historians-are-going-to-tar-and-feather-europes-central-bankers.jpg
     

    Darkpriest667

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    As a retailer I welcome it. But note, it is State Sales Tax, not local sales tax. So the State of Texas collects 6.5% whereas locally our rate is 8.25%. So it still gives online a little help, but again the playing field will be leveled for those of us that maintain storefronts, inventory, etc.


    You know, most shops these days I find the prices to be extremely inflated from the online prices even after Shipping, FFL fee, and taxes I still get a better deal online. That being said.. I looked at your online shop and some of your prices are actually already competitive to the online retailers.. It's too bad you're in Tomball and not in the DFW area. My father lives in Humble so I know the kind of clientele you cater to, which surprises me that your prices are so competitive. Next time I'm down there I'll stop by your shop. I'm always looking for deals on guns and ammo.
     

    stdreb27

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    You know, most shops these days I find the prices to be extremely inflated from the online prices even after Shipping, FFL fee, and taxes I still get a better deal online. That being said.. I looked at your online shop and some of your prices are actually already competitive to the online retailers.. It's too bad you're in Tomball and not in the DFW area. My father lives in Humble so I know the kind of clientele you cater to, which surprises me that your prices are so competitive. Next time I'm down there I'll stop by your shop. I'm always looking for deals on guns and ammo.

    Ain’t that the truth. I just bought a hone on amazon. Brick and mortar guys are 120 bucks. I got it for 70 off amazon and I didn’t have to make a special trip into Houston to get it.
     

    TheMailMan

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    We needed a new modem for our DSL line. Centurylink, bless their black hearts, will only rent you one for $10 a month and the one they rent sucks. NO ONE locally carries one. Amazon had one for $67.99 and it was at my door the next day.

    Since Centurylink is the ONLY option for everyone around here you'd think that some store would carry modems.
     

    Lunyfringe

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    We needed a new modem for our DSL line. Centurylink, bless their black hearts, will only rent you one for $10 a month and the one they rent sucks. NO ONE locally carries one. Amazon had one for $67.99 and it was at my door the next day.

    Since Centurylink is the ONLY option for everyone around here you'd think that some store would carry modems.
    I'm in a Frontier area... they can't spell DSL. I was centurylink in an even more rural area in Colorado and they provided 15Mbps aDSL... Here I'm closer to town and Frontier won't do anything, I'm on a wireless ISP, fixed antenna to their equipment on a water tower. Expensive.
     

    A & P

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    Feel free to correct me if Im wrong, but I don't see how it levels the field? Assuming you do most of your sales in one state compared to a business that does business in all 50. You will be required to file and comply to one state when they would be required to do the same x45 or so.
    The effect on you is minimal while it would be quite the opposite for the other. For many possibly devestating.
    It levels the playing field like this:

    If you're looking at a gun online, let's say it's $500. Maybe you even go into your local store to look at it, talk with the clerk for while, ask him if he likes it, feel the trigger pull and break, make sure it fits your hand, etc. Now, unless the culture changes to charging "museum/showroom fees", you're doing all of that for free. Odds are you're not offering to tip the store for their service. So the store is actually out that time, money, and cost of inventory. But even if you say "I already know what I want", that's fine too. This "museum" effect is just part of the "not fair" comparison. Charging online sales tax might help with local product selection. Many gun stores won't carry high end optics because the margins are still fairly thin and too many consumers will come to check out the optics just to then buy them from Optics Planet and save $200 in sales tax. How is that fair to the local retailer?

    On that $500 gun, you'll show it to your local retailer and tell him, "I'd really like to buy locally and support the local/small business. Can you match this price out the door?" New guns typically have 15% gross margin at most. Some are more like 10%. So for the local store that you want to support to match your Bud's, Sportsmans Guide (who usually just drop ships from distributors), or others, they'll have to eat the 8.25% tax. You're okay with that of course. So he offers to match the price of $500. He backs out the tax, so his margin is down to 6.75% gross. Of course, you'll pay with a rewards card for the points which costs the merchant 3% so now he makes 3.75% net on the sale. 3.75% on $500 is about $18. Between the checking in of the gun, helping you with the 4473, running the background check, stocking merchandise, paying rent, lights, labor, insurance, etc., the owner is lucky to make anything out of the $18.

    The internet sales tax now allows the local gun store owner to match the list price to compete, and then the after tax price is roughly equal. The store might have had to pay shipping to get the gun in (each distributor is different). If he had it in stock he had to carry the cost of inventory. And if you buy it online, then you pay the transfer fee but there again, the store is doing the extra work of the 4473 and logging it. Might be 10-15 minutes of interaction that has to be paid for. The online store probably never talked to you, probably took 30 seconds to process the transaction automatically, and maybe even never had it but drop shipped it.

    So the point is that the service is usually much better locally but people don't tend to value that when saying what's equal or what's fair. Asking a local store to eat the sales tax is the unfair part. It's not really the consumer's fault though. Of course they want the best price. It's just too bad most people don't want to pay for the service. They expect the local store to bend over backwards and give the buyer/transferrer their undivided attention but then want them to price match some faceless online webserver. This sales tax parity thing does level the playing field.

    As for the so-called burden of online sellers collecting tax, oh well! The big companies who have been crushing the mom and pops locally through pricing and efficiency will crush online too. They already have the taxing software in place. I'm guessing the online venues for sellers will offer the tax collecting or accounting as a service. If you're on ebay, for example, the buyers location will be known and maybe each month Ebay sends you a report or statement. Amazon sellers: same thing. Gunbroker sellers: same thing. It'll probably be so sophisticated that they could even bill you and you pay a small fee for the service. It's like taking credit cards through paypal. As a business owner, we are required to do accounting. Many just use Quickbooks. Then, when we have to file extra tax paperwork, we just use TurboTax for Business. Intuit, or someone like them, will surely offer a $30 annual solution for state-by-state tax reporting.

    So, in terms of fairness, no internet tax is unfair and is absolutely killing local retailers and especially gun stores or other low margin, relatively low volume, relatively high priced vendors. It's the government picking winners. Let us compete on service, selection, prices, ability to manage costs, etc. But to pick companies who sell online and tell them "you can start off with a 8.25% advantage on every sale" is ridiculous. Not to mention, Texas doesn't have an income tax but rather relies heavily on sales tax. So the income you earn in Texas that you use to buy stuff online kind of skirts the Texas "income" tax. There is a "use" tax that you're supposed to pay, but most people ignore that. It's practically unenforceable.

    Imagine if your employer could hire labor out of state and not pay employment taxes (FICA, TWC, FUTA). He asks you to work for 10% less money than the guy in Oklahoma because, well, he can just get the work done tax free online. You're going to respond, "but I'm doing the same work...I'm even here locally which should be a benefit to you...and it's not my fault the government makes you pay employment tax." His response, "ya, but I can save money buying online and the taxes are a lot of money." That's basically the situation local B&M stores are in.

    Ironically, a lot of people in Texas still buy on Amazon. They pay sales tax (for Amazon direct stuff). They didn't quit when Amazon started charging sales tax. It's still quality product, conveniently delivered, generally at good prices, etc. Charging sales tax for online purchases will be easily absorbed by the consumers.

    As a final note, realize that local businesses support locals. If you buy your gun or optic online, try asking them for a donation for your kids baseball team or FFA project. Locals knock on local business owners doors for donations all the time. Where is the local merchant supposed to get the money for the donation if the consumer is buying everything online to save the sales tax. If you buy from a big box store, same thing. Ask them for a donation and see how it goes. The guy that owns the local store is probably a member of the local community and is the guy with his company's name on the kids baseball calendar or the guy buying the girl scout cookies. He's the guy that'll tighten that loose gas key for free or show you the crush washer is on backwards when you're building your AR. He's the guy who will tow a strangers car to the gas station out of kindness when they ran out of gas in front of your store (we did that today for someone). Ask Buds to tow your car. Probably not going to happen.

    So internet taxation is fair. It levels the playing field. But more than the money, consider supporting your local business for more than just the money issue. Support them for them supporting your community and all the "free" service they provide. Nobody's asking a for a handout (most gun store owners are not liberal entitlement minded people), just a fair shake.
     

    benenglish

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    Most of what you write is spot-on. However...
    So the point is that the service is usually much better locally but people don't tend to value that...
    ...is problematic.

    There are good gun stores. Since I don't know you, understand that this isn't directed at you but at LGSs in general. When I find a good gun store, they get my money.

    However, I've had so many bad experiences at local gun stores that they, generally, don't get much sympathy from me. Everyone has encountered the know-it-alls behind the counter who don't actually know anything but are perfectly willing to make stuff up as they go along. I've told the story before (and won't repeat it here) about a large local gun shop that will tell anyone on the phone that they have anything in stock just to get them in the store. When they get called on it, they claim they just sold the last one they had in stock and try to sell the customer something else. There are gun stores out there who put all their price tags so you can't read them except for the ones that say "Not For Sale", a way of simply saying "We're better than you. We have cooler toys. You must beg us to be let into the inner sanctum."

    I could go on and on. There are jerks in every area of retail but some of the most egregious have been in local gun stores.

    I reject the notion that "service is usually much better locally" across the board. Service usually sucks and the places with good service tend to stand out in my memory.

    Like I said, this happens across all sorts of retailing. I think it's one of the driving forces behind the way internet sales have taken over. You note that Amazon continues to sell in Texas despite charging tax. To me, that seems perfectly reasonable. When I buy online, I don't have to deal with some smarmy sales rep, some kid who resents being drug away from his phone to ring me up, or some old jerk who's still working retail at 60+, hates the whole world, and can't conceal that fact.

    To me, the biggest impact of taxes for online sales will be the regrettable loss of some small mom-n-pops. I don't think that it will be as big a boon for medium-sized brick-and-mortar stores as some are expecting because too many of them are miserable shopping experiences already. I'd happily pay 8.25% to not have to darken the door of many businesses.

    And for those B&Ms that are a joy to deal with and leave me with a smile on my face already, it'll be a good thing.

    tl;dr - The results will be a real mixed bag but IMO it's a mistake to assume the superior service found at real-world storefronts will be much of a factor except for the very few merchants who already do that well.
     

    avvidclif

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    I understand your long post as the new law will probably basically put me out of business. Mine is unique in that there is only one other place in this state that offers the service I provide. Many states have none.

    On your business I try to buy local but I'm not going to pay 20% more plus the tax. If your prices are the same, appx, I will pay the tax and go on.
     

    Ole Cowboy

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    It levels the playing field like this:



    So, in terms of fairness, no internet tax is unfair and is absolutely killing local retailers and especially gun stores or other low margin, relatively low volume, relatively high priced vendors. It's the government picking winners. Let us compete on service, selection, prices, ability to manage costs, etc. But to pick companies who sell online and tell them "you can start off with a 8.25% advantage on every sale" is ridiculous.
    You almost make a legit case, almost.

    We don't play by fair or not fair, that is not capitalism. I not only love but I thrive on the competition that I have in the marketplace. I can tell you this other companies that do what I do hate me, because I out sell them...

    Most people jump into business thinking they can sell more based upon price and efficiency. Trouble is you cannot compete on price because someone will ALWAYS sell cheaper than you and it becomes a race to the bottom. I to used to think that was the secret to sales, cheap price and make the business more efficient and you win. Some can, Wal Mart does, not to say you can't win, but it's hard to beat the big guy on the block at his own game.

    The 3 things the public sees are price, quality and customer service and only in RARE cases can the buyer get all 3, its hard to pull off.

    Lessons learned:

    My good friend Mr Bill owned a GM dealership one of the very few in the US because it was family owned going back to the 1920's.

    I would stop by and drink coffee with him and we talked, hunted and fished together. One day I am setting in his office and in comes a customer storming in, madder than a wet cat about his piece of junk car as he rants and raves I see Mr Bill pull out his large desk checkbook and he begins writing. Finally the customer stops the rant and Mr Bill looks up and asked him what he paid for the car. It was around $21,xxx. Mr Bill writes and hands him a check for $22,000 and says that should cover it and just leave the car where it sits and I will have someone take you home soon as you are ready.

    Customer reaches over and takes the check, saying nothing and walks out. I am DROP JAWED. You got to be kidding Mr Bill, IIRC it was right at $500 over what he paid out the door for the car. Mr Bill laughed and said, watch him he will be back in a few min with the check. Sure enough he came back about 10 min later, handed him the check and Mr Bill said go out there and pick any car you want and take it home, tell John (svc guy) what wrong with yours and I'll call you went it gets fixed.

    The guy I will take that blue on on the end, Mr Bill says here is the keys, see ya later and stop off at the Exxon station at the light and tell them to bill me for a fill up.

    I am stunned and we talk. He tells me he sells cars all over the US, in fact every state except Alaska and Hawaii. Then he said I don't control quality, GM does, but I control customer service and price, I sell as cheap as any will or can and I give the best customer service. My business is based upon word of mouth, we don't and never have advertised, this was my grandfather business model, my fathers and I have not changed a thing.

    Mr Bill overcame the quality issue by standing behind the car, giving the best customer service and price, which turned into sales across the US and not many dealers can sell outside their Zone unless its and bonafide customer order.
     

    A & P

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    benenglish: very fair criticism. Many stores in all industries have employment issues. Just look at the level of service from the typical Chik Fil A versus Burger King or Carls Jr (based on my consistent observations). It's hard to find good help. We are quick to fire someone with a bad attitude (except once; found out it cost me several customers). Management can be to blame for that. So some of the bad attitudes at LGSs are just hiring issues. Now, sometimes that tone is set by the store owner. There are MANY LGSs who (sadly) are place for ex-cops or vet or other alpha-type owners (sorry to stereotype) to size up customers. Frankly, that's what put us IN business: the anecdotes of being people we referred to other stores being treated horribly. I'm not trying to make this about us so back to my point.. As for the better service, what I meant was compared to online stores. I draw a big distinction between someone who knows what they want and someone who is shopping and needs help. We had a customer come in and spend, no joke, FIVE HOURS over three days talking to us about silencers. One day, a customer who waited 45 minutes behind him just laughed when he left. I apologized profusely. I asked why he stayed. He said "I just wanted to see how long you'd take the abuse! I couldn't have done it!" The guy did buy two silencers, but he was a rough customer! Another guy came and spent 30 minutes on three occasions handling ARs. Each time when he gave it back he'd ask me to match someone elses price. The first time it was Academy. I said Okay. Then he later asked me to match Bud's. I finally told him, "if Bud's will let you hold that gun for 30 minutes on three different days, show you how to break it down, answer all your questions, show you how it functions, etc., ...if they'll match my level of service, I'll match their price." He left. Then, two weeks later he came back and bought the gun (had to match Academy's price though). So it's that kind of "service" I mean that is better than online. If a store is rude, condescending, or otherwise put out, then by all means don't shop there. But, at the same time, realize time is money. We see the service we provide as part of the sale. But if there is no sale, then the service was free. It's hard to match an online price that has no service attached if you did five free "services" for every one sale. That $30 profit has to pay for 5 sessions of handling, explaining, etc. Imagine the cost of goods at Walmart if every other customer needed 30 minutes of "consultation". I'm not complaining, but rather explaining, the difference in operational cost of the LGS versus OGS (online gun store). So, again, it's hard to match prices when the service level isn't matched. But we do it. And other LGSs try to do it too.

    AVVIDCLIF: I wish I knew what your business is so I could comment on it intelligently. Seems like if you're the only one doing it, then it's either obsolete or you can command your own price! Not sure how the internet sales tax thing will affect you. If it's just the burden of reporting taxes, realize that software innovators will likely have a solution for you before your quarter is over! Payroll is a pain in the ass but for just a few duckets I now can do it myself in about 10 minutes and for $400/yr roughly. So there will surely be a solution for you. Best wishes with that. As for paying 20% more plus the tax...I don't blame you! When we carry a new product, we typically look up MidwayUSA and then match that price. Still, we have to charge 7.25% tax (outside the city limits). I can't eat that on 10-20% margins. Midway ships for $6.99 or whatever. So many places, like us, are very price competitive. We charge MAP on everything that has MAP, but we just can't get around the tax! I wish more people felt like you and had ambivalence about paying the extra 7.25%. I even have free gourmet coffee for my regulars! (take that, Starbucks!) One guy even has a special mug he keeps here.

    OLE COWBOY: I'm 100% capitalist. I don't believe in "fair" in that sense. But we do have fairness of sorts. It was unfair that the government said this business can fail but this one is "too big to fail". That's not capitalism. Monopolies are broken up all the time in the interest of fairness but pure capitalism would let them exist. I think "fair" and "capitalism" can coexist in the meaning of "everyone has to collect/pay sales tax". That's fair and still aligned with capitalism. Level playing field, not equalized results. Kind of the concept of "equal opportunity" versus "equal outcome". Sure, you could say "well, you should just create a better online store and compete". Okay, but then the tax disparity is creating, and crushing, markets. That's not free markets at work but government policies dictating the markets. It's kind of like the concept of tariffs being contrary to free markets and capitalism. I essentially have a 7.25% tariff placed on me simply for selling locally. That's not capitalism.

    I agree with you on "price, quality, and service". But you should have to pay something for all three. All three cost money. I can be the low price if I don't have to service you (online sales) or build it cheap. I can give you top quality, but it'll cost you. I can have amazing service, but that might cost (manpower, education, master skill set, time, etc). The problem is when the customer comes in and wants the premium service at the lowest prices. Read my example of the AR handler above.

    Loved the GM story. It's rare to be able to be the best service and the best price, although those two are not mutually exclusive. I have had to evolve a bit and not beat myself up on not getting every sale. I am probably "too nice" to too many customers (once I left early to help our feed store customer for 3 hours catch her horses that got out; she now shops at Tractor Supply...gee, thanks). But sometimes you never know so I'm nice to everyone. Had a 18 year old kid come in. Very polite. Asked a bunch of questions about silencers. Had his friend and friend's girl with him. Three kids fascinated by the silencers. I talked with them. Entertained them. They were exceptionally polite. Turns out the kid is actually 28 but looks 18. He buys 7 silencers at a price of $7,000. Who knew. But if I had sized him up and acted like the typical LGS (per benenglish), I'd never have got the sale. So I tend to fume a little too much about every sale lost to the online world or every "tire kicker". I think the internet tax parity will help local businesses. Maybe the increased revenue will make them friendlier. Don't know. Never hurts to be nice. I always tell my employees that. Kindness is free. Unfortunately, payroll costs money. So nice needs to convert to sales at some point. Even the museum charges you to look at their stuff. As a side note, it's also interesting how we look at money. People will spend 5 hours price shopping something or trying to do a group buy to split up hazmat charges and in the end save about $20. That's $4/hr savings. I've finally grown out of that. I find myself more often just buying things when and where I need them. I used to spend 30 minutes trying to see if Lowe's washers were 2c cheaper than Tractor Supply. Ya, that kind of stupid. My sanity and my time are worth more than $4/hr. (as I spend an hour typing on a forum...but this is my mental decompression time...better than watching tv). I don't let my mechanic do stuff for free. I just tell him "do whatever you need to do" and I insist on paying for it. I like that kind of relationship. I feel better about it. I eat at my friends expensive restaurant and don't accept anything for free (unless they want me to try a new item to get my feedback). They need to make money too. Sometimes the relationship has value beyond price. And it helps with the sense of community, too. Granted, I can't eat online or get my truck fixed online. Well, you get the idea.
     

    benenglish

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    benenglish: very fair criticism. Many stores in all industries have employment issues. Just look at the level of service from the typical Chik Fil A versus Burger King or Carls Jr (based on my consistent observations). It's hard to find good help.
    Price's Law applies universally. In any organization, the square root of the total number of employees is equal to the number of employees who do half the work.

    Once or twice in my life, I've run into someone so good at customer service I wished I had a retail store just so I could poach them. "It's hard to find good help" is one heck of an understatement.
    AVVIDCLIF: I wish I knew what your business is so I could comment on it intelligently.
    He covered it back in post #11: https://www.texasguntalk.com/threads/get-ready-to-pay-sales-tax.86665/page-2#post-1745106

    He runs exactly the sort of business I figure will have potentially lethal problems.
    ...if I had sized him up and acted like the typical LGS (per benenglish), I'd never have got the sale.
    Short story - My dad took one of my mom's cousins out to buy a motorcycle. The kid had his license (easy to get back in the 1960s) and $750 in his pocket, saved from several jobs he'd been doing since before he was a teen. That was enough to buy a decent new bike in those days.

    At the first dealership, dad walks in with him and the salesman greets my dad. Dad points the salesman to the kid. The salesman just walks away. After a while, the manager comes out to tell the kid to stop climbing on the showroom bikes and get out. They left.

    After making the purchase at the second dealership, my dad insisted that they go back over to the first dealership. He went inside, got the manager and the salesman, dragged them to the front door, and showed them the kid on the new bike. He then rather pointedly informed them that not only had they blown that sale, he was going to tell everyone he could to avoid their place at all costs.
    Kindness is free.
    It sure is. And sometimes it's damned profitable.
     
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