Tax on core charge...
Tom Paparounis
This has happened several times to me and if someone could
explain what is going on, I'd be grateful.
Used to be, I'd go to the auto parts store, get parts and if
there was a core charge on that item, I'd pay the core
charge which was returned when I brought the core back. The
whole reason was that if you did not bring in the core, they
simply kept your money; the value of the core.
The core charge was not assessed at all if you brought the
old part with you when you made the purchase. They did not
charge a core charge because you are giving them the old
part at the time of purchase. Pretty easy to understand.
Ok. Now we pay tax on the core charge and the tax is NOT
returned when you bring in the core. Well, that too is easy
to understand.
Guess what happens when you present the old part at time of
purchase of the new part? Same thing. Seriously. They
ring up the part along with the core value, add tax to the
whole thing then subtract the core value keeping the
additional tax they collected.
Why do I have to pay a core charge tax when I should not be
paying core charge at all?
Can anyone explain this to me?
Thanks, Tom
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Dick Adams
> This has happened several times to me and if someone could
> explain what is going on, I'd be grateful.
>
> Used to be, I'd go to the auto parts store, get parts and if
> there was a core charge on that item, I'd pay the core
> charge which was returned when I brought the core back. The
> whole reason was that if you did not bring in the core, they
> simply kept your money; the value of the core.
>
> The core charge was not assessed at all if you brought the
> old part with you when you made the purchase. They did not
> charge a core charge because you are giving them the old
> part at the time of purchase. Pretty easy to understand.
>
> Ok. Now we pay tax on the core charge and the tax is NOT
> returned when you bring in the core. Well, that too is easy
> to understand.
>
> Guess what happens when you present the old part at time of
> purchase of the new part? Same thing. Seriously. They
> ring up the part along with the core value, add tax to the
> whole thing then subtract the core value keeping the
> additional tax they collected.
>
> Why do I have to pay a core charge tax when I should not be
> paying core charge at all?
>
> Can anyone explain this to me?
Let's use a toner cartridge as an example of a core.
If you purchase a new toner cartridge and give them
your old one, you will pay tax on the sale price of
the toner and receive an after-tax credit for the
cartridge you gave them.
But have them refill your toner cartridge, you only
pay for the refill and the tax on the refill.
Dick
--
I believe it was Mark Twain who wrote "No man's
life, liberty, or property is safe while Congress
is in session."
Phil Marti
> Guess what happens when you present the old part at time of
> purchase of the new part? Same thing. Seriously. They
> ring up the part along with the core value, add tax to the
> whole thing then subtract the core value keeping the
> additional tax they collected.
>
> Why do I have to pay a core charge tax when I should not be
> paying core charge at all?
>
> Can anyone explain this to me?
Perhaps the store that's charging it can. That's where you
need to direct your question, which basically boils down to
"why are you charging me at all for something that I'm not
buying?" I don't know whether auto parts stores are as
bureaucratic as banks, but if they tell you it's their
policy, find a store with a different policy.
Phil Marti
Topeka, KS
Wayne Brasch
> This has happened several times to me and if someone could
> explain what is going on, I'd be grateful.
>
> Used to be, I'd go to the auto parts store, get parts and if
> there was a core charge on that item, I'd pay the core
> charge which was returned when I brought the core back. The
> whole reason was that if you did not bring in the core, they
> simply kept your money; the value of the core.
>
> The core charge was not assessed at all if you brought the
> old part with you when you made the purchase. They did not
> charge a core charge because you are giving them the old
> part at the time of purchase. Pretty easy to understand.
>
> Ok. Now we pay tax on the core charge and the tax is NOT
> returned when you bring in the core. Well, that too is easy
> to understand.
>
> Guess what happens when you present the old part at time of
> purchase of the new part? Same thing. Seriously. They
> ring up the part along with the core value, add tax to the
> whole thing then subtract the core value keeping the
> additional tax they collected.
>
> Why do I have to pay a core charge tax when I should not be
> paying core charge at all?
>
> Can anyone explain this to me?
This is a State Sales and Use tax matter to be taken up with
whatever State in which you live. That dealer may be making
a mistake-or maybe the State requires them to do it this
way.
Wayne Brasch, CPA, M. S. Taxation
David Woods EA MST
> explain what is going on, I'd be grateful.
>
> Used to be, I'd go to the auto parts store, get parts and if
> there was a core charge on that item, I'd pay the core
> charge which was returned when I brought the core back. The
> whole reason was that if you did not bring in the core, they
> simply kept your money; the value of the core.
>
> The core charge was not assessed at all if you brought the
> old part with you when you made the purchase. They did not
> charge a core charge because you are giving them the old
> part at the time of purchase. Pretty easy to understand.
>
> Ok. Now we pay tax on the core charge and the tax is NOT
> returned when you bring in the core. Well, that too is easy
> to understand.
>
> Guess what happens when you present the old part at time of
> purchase of the new part? Same thing. Seriously. They
> ring up the part along with the core value, add tax to the
> whole thing then subtract the core value keeping the
> additional tax they collected.
>
> Why do I have to pay a core charge tax when I should not be
> paying core charge at all?
>
> Can anyone explain this to me?
Not without knowing what state you're in. I know that in MA
that auto parts stores have a notice from the DOR explaining
this position, and they do exactly what you mention.
David M. Woods, EA, MST, ChFC
(617) 723-2422
Boston, MA
www.rytercpa.com
dwo...@rytercpa.com
This advice does not constitute a client relationship.
If you are not a client, you are on your own.
Drewremedy
> This has happened several times to me and if someone could
> explain what is going on, I'd be grateful.
>
> Used to be, I'd go to the auto parts store, get parts and if
> there was a core charge on that item, I'd pay the core
> charge which was returned when I brought the core back. The
> whole reason was that if you did not bring in the core, they
> simply kept your money; the value of the core.
>
> The core charge was not assessed at all if you brought the
> old part with you when you made the purchase. They did not
> charge a core charge because you are giving them the old
> part at the time of purchase. Pretty easy to understand.
>
> Ok. Now we pay tax on the core charge and the tax is NOT
> returned when you bring in the core. Well, that too is easy
> to understand.
>
> Guess what happens when you present the old part at time of
> purchase of the new part? Same thing. Seriously. They
> ring up the part along with the core value, add tax to the
> whole thing then subtract the core value keeping the
> additional tax they collected.
>
> Why do I have to pay a core charge tax when I should not be
> paying core charge at all?
>
> Can anyone explain this to me?
What state are you in?. Some states charge on the net
transaction, some on the gross. In my state it says on the
net but a lot of retailors charge on the gross under color
of an opinion letter written back when computer terminals
were stupid.
And in my state if I retun something I get may tax back ergo
a returned core should get the tax back.
My guess, store is wrong but nobody has fought the point
It most certainly would cross my mind that some stores
charge sales tax on the gross but remit to the state on the
net.
I very strongly believe that at place like KMart they can do
all sorts of games with smart terminals on such tax issues.
And have an opinion letter in my files saying in effect its
OK for KMart to collect on the gross even though state law
is quite clear that many situations require KMart to collect
on merely the net. You think that one thru.
And my state is clear in other areas with a "trade in" that
one pays sales tax only on the net.
Check your state code--but don't assume people are not playing games.
Tom Paparounis
> Used to be, I'd go to the auto parts store, get parts and if
> there was a core charge on that item, I'd pay the core
> charge which was returned when I brought the core back. The
> whole reason was that if you did not bring in the core, they
> simply kept your money; the value of the core.
>
> The core charge was not assessed at all if you brought the
> old part with you when you made the purchase. They did not
> charge a core charge because you are giving them the old
> part at the time of purchase. Pretty easy to understand.
>
> Ok. Now we pay tax on the core charge and the tax is NOT
> returned when you bring in the core. Well, that too is easy
> to understand.
>
> Guess what happens when you present the old part at time of
> purchase of the new part? Same thing. Seriously. They
> ring up the part along with the core value, add tax to the
> whole thing then subtract the core value keeping the
> additional tax they collected.
>
> Why do I have to pay a core charge tax when I should not be
> paying core charge at all?
>
> Can anyone explain this to me?
Thanks to all who replied. I live in Maryland. I will check
into this further because it is really starting to bug me.
I just don't know how to go about it. Who do I check with
on this issue?
Thanks again. Tom
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kench...@gmail.com
If you accept trade-ins or require the exchange of a used item or core when making sales, you must charge tax on both the cash paid and the value of the trade-in or exchange.
For example, if you sell a starter for $54 in cash and collect $10 as security for a trade-in of an old starter, you must collect tax on $64, the cash price of the new starter plus the value of the anticipated trade-in. When the customer turns in the old starter, you do not refund the tax on the $10, which you refund to the customer.
Selected re-manufactured parts exempt
The tax does not apply to core charges made in connection with sales of these re-manufactured truck parts and their components:
Air brake systems
Engines
Rear axle carriers
Transmissions.
--
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kench...@gmail.com
Retired
the starter for $64. Store collects tax on $64
Then the store *buys* the old part for $10. The seller/customer can't
collect a tax from the store. (Beside the store has a resellers'
exemption anyway)
The words "core charge" should not even be used in this transaction.
And why some truck parts are exempt must be a sweet-heart deal for the
industry. ;-)
GrayMatter
http://www.boe.ca.gov/lawguides/business/current/btlg/vol2/suta/315-0370.html
315.0370 Core Deposits. New Parts: The customer purchases the parts, leaves a core deposit, and is charged tax on the total. Later, the customer brings in a used part. Under these circumstances, the customer would be entitled to a refund or credit for the core deposit only. Tax paid with respect to the core deposit should not be refunded or credited to the customer.
Reconditioned Parts: The customer purchases the part, leaves a deposit, and is charged tax on the total. Later, the customer brings in a used part. Under these circumstances, the customer would be entitled to a credit or refund of the core deposit plus tax paid with respect to it.