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Iowa State Trap tax situation

Discussion in 'Shooting Related Threads' started by jjv1234, Jan 12, 2010.

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  1. jjv1234

    jjv1234 Member

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    I had heard rumblings of this earlier this summer and just received this letter yesterday from ISTA. Has any other state had issues with this? This could bankrupt the organization. It seems like with state budgets being tight that they are attacking any organization, expecially those with "wealthy" trapshooters that could pay the difference. What the hell is a "use tax" anyway?


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  2. 870

    870 Well-Known Member

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    "What the hell is a "use tax" anyway?"

    Consider it the same as "sales tax" in this instance. What it means is that sales tax apparantly wasn't paid when the targets were originally purchased so they require payment as a "use tax" since they consider the association the consumer of the targets.

    For sales tax purposes, many states consider the club the consumer of the targets, thus tax is owed on the purchase of the targets. The clubs are not considered to be selling targets to shooters, instead they are charging a fee for use of the shooting facilities.
     
  3. halfmile

    halfmile Well-Known Member

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    870, a use tax is paid by the consumer of the taxable material.

    In Wisconsin, I had to pay a use tax when I installed equipment in a customer's building. This was better than sales tax, since it was based on my cost rather than the selling price. Also labor costs were not taxed.

    If I sold goods outright, I had to collect and report sales tax.

    I have difficulty believing no one in the organization was aware of the sales tax structure with regard to the above mentioned items.

    I have had, on occasion, to contact the Department of Revenue if I had questions on whether an item or service was taxable.

    Many contractors I knew would simply pay sales tax when they bought their supplies, just to avoid the gargantuan headache of posting and tracking all material that went through the company, and paying or not paying depending on the category. That way it was a done deal.

    Your attorneys may want to find all items sales tax was paid on, since they can't be taxed again. I would not agree with regard to ATA daily fees, since they are taxable in Ohio, which is where the money went.

    Out of state sales for me were tax exempt.

    Hope your lawyer is a good one. If you have a shooter within the IDOR
    It would be a plus.

    good luck.

    HM
     
  4. 870

    870 Well-Known Member

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    "870, a use tax is paid by the consumer of the taxable material."

    Isn't that what I said? If the consumer doesn't get charged sales tax on the purchase, they pay a use tax on it. Both are based on the consumers cost. Same thing as far as this thread is concerned. Note, charging that you failed to COLLECT sales tax on taxable sales is a different matter. In that case it's based on your selling price.
     
  5. jjv1234

    jjv1234 Member

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    870, I understand how the sales vs use tax operates. What I don't understand is how the use of the targets and the sales tax that I pay as a shooter does not satisfy this requirement. Use of the targets should be implied with use of the facility, should it not?
     
  6. 320090T

    320090T Well-Known Member

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    This could be interesting. MANY clubs do not pay sales tax when they purchase targets nor do they collect it. Thought being that if the item is used up on site, it is not taxable. Two clubs in West Central Indiana have been cited for not paying sales tax and both got out of it somehow.
     
  7. N. J. BOB

    N. J. BOB Active Member

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    Shut up
     
  8. 870

    870 Well-Known Member

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    jjv:

    What they are saying is that for purposes of this tax, a Club uses the targets as part of its service of providing a trapshooting facility. The shooter would not be charged sales tax for buying targets since he is not considered to be buying the targets.

    Unfortunately, it's possible the shooter still gets charged sales tax for the shooting fees, unless the state exempts fees from participants in a sporting activity, which some do.

    Let the attorneys do their work and hopefully it will be settled w/o any problems.
     
  9. BeerKing

    BeerKing Active Member

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    jjv1234, the ISTA has a solid bunch of people in office. I am sure that they have inquired with other organizations and the ATA to see where they stand on this issue. If you have any care or concern for the well being of the ISTA you will retract your post. Posts like this lead to vicious rumors and that is something the ISTA does not need at this time. Two years ago people made very negative comments on this web site after the home grounds were flooded. There were rumors gong around saying there would be no state shoot at the home grounds. The ISTA had 6 weeks to rebuild and with the support of its directors and membership they had a state shoot. In fact it was one of the better state shoots they had had for a long time. We do not need any reason for people to start thinking or talking negative. When the issue is resolved then we can comment. For now lets think positve and let the ISTA officers and delegates do their job.
     
  10. grnberetcj

    grnberetcj Active Member

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    Sure is nice to live in Delaware (no sales tax)....

    Curt
     
  11. grunt

    grunt TS Supporters TS Supporters

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  12. Pride Engineer

    Pride Engineer Member

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    This same issue was raised in Minnesota a few years ago, clubs ended up paying the back taxes. Fortunately, the MTA started paying this tax after we moved our state shoot to Alexandria and the issue was raised by the Alexandria ownership.

    Mark Zauhar, MTA President
     
  13. Leo

    Leo Well-Known Member

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    I do not think that not for profit organizations have to pay use tax on supplies. That might vary state to state.
     
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