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I am going to post this even though there will be a few I told you so's. In 2004 I purchased a new atv from a certain dealer in the Chattanooga area that is famous for low priced atvs. Being from NC I couldn't resist the deal of no out of state taxes. I kept that atv for a while and later sold it. In March of this year I made another trip to Chattanooga and purchased another new atv.
A few days ago I got a nice letter from the NC Dept of Revenue stating that I owed NC sales tax on a atv that I purchased. At first I thought it was on my 2006 model but upon closer review it was indeed on the 2004 model I had already sold. I got a little curious about how the NC Dept of Revenue came to find out about it so I called the dealer in Chattanooga and asked them. They said they were in fact "audited" last year. Last year. Hmm, if that little piece of information was told to me at the time of my recent purchase I would have either - A) walked away or B) Paid the sales tax for NC. They conviently didn't tell me.
Listen up everyone and learn from my mistake of going the easy route. I thought I was free and clear and was saving some dough. Turns out the following is owed:
Like I said I called the Dept of Rev. and they said they would wave the penalty, but I still owed the remaining. That's good, but now I'm worried they will audit them again and find out about the new atv. I may just call them back and tell them about the second atv I purchased to avoid a enforced penalty the next go around.
Okay let's hear all those I told you so's......... but really this is for those considering out of state purchases. If you can get your area dealer close then go for that deal if not then if you purchase from out of state, go ahead and pay the sales tax and be done with it. Then you have no worries and no possible penalties.
It was a state audit right? I'm a little confused. Anything you order from out of state is not taxed. If Tennessee was audited then why did NC send you a Bill. If anything, I would think you owe Tenn sales tax. Why would Tenn. go through the trouble of contacting NC to tell them that there are Taxes owed? How can NC charge you sales tax for what was not purchased in NC? How did NC know? I'm scheduled to pick up a new one in about 2 weeks there and I live in NC also. Can you shed some light?
You're lucky. Where I live I have to have my atv registered in order to get stickers to ride on trails around here. Costs almost 20 bucks a year per atv. And yes when you register it they want to see proof of taxes paid when you purchased it. Brian
1) If you physically picked up the item(s) in the other state, that's considered a "local sale" even though you don't live in that state.
2) If you ordered the ATV and someone ELSE (common carrier such as UPS, trucking company, etc.) delivered the goods to you at your out-of-state location, that's an out of state sale and no state sales tax is due in the seller's state. YOUR state probably wants their equivalent sales tax, though.
Kinda up late right now, my 14 month old just went back to sleep, so I thought I would follow up on any questions on this post.
Sorry if I confused you. I don't know exactly how the process came about...... I'm guessing that through cooperation with the state of TN, NC found out. Most likely from NC dealers complaining about people getting their best price quotes and then in return those people saying, well we can get that a lot cheaper in Chattanooga and not pay sales tax.
Tennessee did charge me a tax but not the sales tax. It was a small tax, probably something for the local county.
Here is what the letter said word for word:
We have information which shows that you purchased items that were shipped to you at the above address. NC G.S. 105-164.6 requires the buyer of tangible property that was purchased outside of NC for use in this state to pay a State and local use tax on the purchase price including transportation charges. The tax is due regardless of whether you made the purchase in another state or had the merchandise delivered from another state to you in NC. Our records show that there was no use tax paid to NC on your purchase.
I don't know for sure but I don't think this guy tried to register it because he lived in the NC area. So he had no reason to.
I will come out and say it that the atv was a Polaris. The Polaris dealer also informed me that the Honda dealer a sister business to the Polaris dealer in Chattanooga was also audited this year. I'm guessing by TN?