Updated!! Pennsylvania: 40% tax = game over for vape

[bnrkwest]

Sorry to say bnrkwest, but you need to check again, New Mexico calls their tax a Compensating tax instead of a Use Tax and there is a special form you are suppose to use to pay your sales tax on items purchased over the internet or out of state.

I must have missed that! What I found is if you use property in NM you have a compensating tax and have to apply for the registration.

 

[Yiana]

Yepper ... it can be reported on line #25 of the PA Personal Income Tax. Looky, looky ... the tax is even on shipping and handling.

"Purchases of taxable items subject to Pennsylvania use tax, including shipping & handling"

Shipping and handling also taxed?

 

[bnrkwest]

I must have missed that! What I found is if you use property in NM you have a compensating tax and have to apply for the registration.

Do you have a link? All I can find is CRS form, which I have to submit because I do some contract work for an out of state non profit org.

 

[bnrkwest]

My wife and I are retiring in the next couple of years. To that end, we made a list of "livability" factors, then ranked each state. The State of Michigan wound up with the highest score — for us. YMMV, of course.

After a lifetime of living in the Chicagoland area, we're sick of decades-long big-blue-government messes. So, our bias is for small-town living. And Hillsdale, population about 8,300, wound up at the top of the heap for us. Again, YMMV — and probably does.

If you don't mind snow Michigan is a wonderful state

 

[daviedog]

Good grief! So when someone moves to FL and brings all their stuff they owe tax on it because they bought it elsewhere ? How do they enforce that?

They don't,, the average Floridian never is in contact with Fl DOR. If you own a small buiness, you've been bruised..

 

[Yiana]

I love my country too. Including brothers/sisters in distressed pennsylvania. Yet it gets harder & harder to love an 'Entity' that is beating the Hell out of you. And for no reason. This isn't for tax revenue. This is being done to kill vaping,,with Malice..

Our country is us people. Our government is the entity in my eyes. The government however hates our country, our constitution, and we the people. That is how I see it. They hate us.

I do not think it would be cost effective for them to do that in the case of individuals. However the red flag for this is a $0 on line 25 of your PA-40, or a $0 on the use tax section of your PA Sales & Use tax return if you own a business. I made that mistake and it resulted in the pleasure of a week-long full audit of the Sales & Use tax accounting for my business back in 2008. They left me with a bill for about $5k in back Use taxes, plus about $1k in interest/penalties.

Anyway, the reason I say it wouldn't be cost-effective for individuals is that 6% (or 7% if you live in Pittsburgh or Philly) of whatever you've spent on out of state purchases of vape gear in the past simply would not pay for the manpower required to do such audits.

Online purchases of cigarettes and big-ticket items that the feds have records of are a different matter. In the case of cigarettes, that $1.60 a pack in excise tax adds up fast, and when the ATF forces vendors to give up their records, it's easy enough for the Commonwealth to send you a bill for back taxes.

Anyway, I can't stress this strongly enough: Never claim that you owe them $0 in use taxes. Always pay them something. Almost everybody buys some stuff on the internet from out-of-state vendors who don't charge PA Sales Tax. They know this, and claiming $0.0 is like waving a red flag in front of an angry bull.

Thank god, I don't have to file state income tax forms here because we don't have them. However, I don't remember the last time I bought something online that did not automatically add my state's sale tax. Maybe it was implemented awhile back I don't know. Maybe they will be implemented there so people can't avoid paying them.

 

[grandmato5]

I must have missed that! What I found is if you use property in NM you have a compensating tax and have to apply for the registration.

That's what I saw first too, but when I dug a little further I found your compensation tax it also applies to sales tax on internet or out of state purchases.

 

[Katmar]

I do not think it would be cost effective for them to do that in the case of individuals. However the red flag for this is a $0 on line 25 of your PA-40, or a $0 on the use tax section of your PA Sales & Use tax return if you own a business. I made that mistake and it resulted in the pleasure of a week-long full audit of the Sales & Use tax accounting for my business back in 2008. They left me with a bill for about $5k in back Use taxes, plus about $1k in interest/penalties.

Anyway, the reason I say it wouldn't be cost-effective for individuals is that 6% (or 7% if you live in Pittsburgh or Philly) of whatever you've spent on out of state purchases of vape gear in the past simply would not pay for the manpower required to do such audits.

Online purchases of cigarettes and big-ticket items that the feds have records of are a different matter. In the case of cigarettes, that $1.60 a pack in excise tax adds up fast, and when the ATF forces vendors to give up their records, it's easy enough for the Commonwealth to send you a bill for back taxes.

Anyway, I can't stress this strongly enough: Never claim that you owe them $0 in use taxes. Always pay them something. Almost everybody buys some stuff on the internet from out-of-state vendors who don't charge PA Sales Tax. They know this, and claiming $0.0 is like waving a red flag in front of an angry bull.

I am on disability and do not file taxes, Rossum. What does this mean to me?
I got busted on cigarette taxes many years ago when Fast Eddie Rendell went after those of us buying cigs online. This is my concern. . Well, that and the fact that Pa is running the vaping business out of the state.

 

[bnrkwest]

That's what I saw first too, but when I dug a little further I found your compensation tax it also applies to sales tax on internet or out of state purchases.

I thought that was just for businesses purchases. What I found is that doing anything in NM on NM property qualifies as a biz and you have to register. I just spent a lot of time with NM tax dept getting this all sorted for myself after an audit. I had some back tax to pay that I thought my tax preparer took care of, wrong, I had to pay penalties too

 

[grandmato5]

I thought that was just for businesses purchases. What I found is that doing anything in NM on NM property qualifies as a biz and you have to register. I just spent a lot of time with NM tax dept getting this all sorted for myself after an audit. I had some back tax to pay that I thought my tax preparer took care of, wrong, I had to pay penalties too

From the NW Taxation and Revenue frequently asked questions page :
What is the purpose of compensating tax?
Compensating tax helps to eliminate unfair competition from out-of-state businesses. It levels the playing field when New Mexico buyers buy property, services, or some combination of property and services from out-of-state sellers who otherwise have no gross receipts tax obligations to New Mexico.

Look under customer responsibility: New Mexico Internet Sales Tax | Nolo.com

 

[TravelinGirl]

I hate seeing what is happening with vaping and the states. Many feared the FDA. I feared both the states and the FDA but many would hear none of it.

Now that it is happening, people are ...... and they should be.

I have never gotten involved with the political back and forth on this forum. I sat back and let others pass it back and forth. I knew politically, vaping was in trouble.

When the deemings came out, I saw many begin the stock up process.

I was around during the FDA court cases and Judge Leon stating it was a tobacco product not drug delivery devices.

When vaping was 'labeled' something other than what it is...VAPING.. I knew we were in trouble I just did not know when it would happen.

If it had been labeled a drug delivery device, we were up the backside.

If it was labeled a tobacco product, we were up the backside.

I knew, politically, it would never be simply 'vaping.'

It would be either a pharmaceutical or a tobacco product. Too much to lose for it not to be 'labeled' one of these two things.

Many are now getting into the I am for Trump, I am for Clinton discussions. ALL based on vaping and which one would take the best course, in their mind, as far as their vape goes.

Some now say they will not vote for Trump because of his VP choice and his stance in Indiana on Vaping.

A few months ago, yeah, I would have voted with vaping on my mind. NOW, with all the terrorist attacks going on, my thought process has changed.

I have just lost some that were very dear to me in the latest attack. I lost 3 very near and dear on 9/11.

This latest attack and loss has jolted me back to reality here.

I can no longer light a candle, show my support and move on with it. I can no longer have the thought of, it want happen here. IT HAS ALREADY HAPPENED HERE and I still fell back into that thought mode.

My stance now is, if I were to go to vote today, vaping would be the last thing on my mind.

I have let my nic need/addiction take control of my thoughts etc where elections/politics are concerned.

I was mad at what they are doing to vaping and I had the mentality of, vote them all out.

Now, with the terror going on, my mentality has been brought back to reality.

It does not matter what mod, tank, flavor, mg of juice or how much it cost me...THAT vape set up in my hand will not protect me from being gunned down, blown to bits or plowed down as if I were a wild animal standing at a event.

I have come to realize the past few days, I MYSELF can control my nic need/addiction.

It was MY choice to begin using nic in the first place 30+ years ago.

Nic delivery I can take control of and keep myself going with the LUXURY of getting my nic fix.

I can stock up if I wish, I mean, we knew this was coming. I can protect myself from the taxes if I wish to do so.

My friends did not have the chance to protect themselves from a terrorist plowing them down on a sidewalk/street a few days ago.

THEY HAD NO CHOICE. With vaping I do have the choice. Stock up or pay the taxes to continue my LUXURY in life.

I call it a luxury because I have an addiction. But then, if I were not addicted, I would be vaping low mg for health reasons as well.

For my health reasons, if I did not have vaping, I would NOT go back to smoking. I would use snus instead.

BUT, my addiction is worse than the health so therefore, I consider it a luxury. I could easily use all natural supplements, bypassing pharmaceuticals, for the health issues if need be.

I realize others can not/will not take this path for health conditions. That is their choice. My post here is MY choice.

Yes, my mentality has changed.

Vaping is not EVERYTHING in my life and during these times with all that is happening, I have been slapped with reality.

At this point, I will not be voting with vaping anywhere in the equation when it comes time to vote.

What I will be voting on is, will Trump help keep me and my loved ones safe from terrorist or will Clinton.

Being that Clinton did not protect our Ambassador or others, lied about it and covered things up to save her own backside. Add to the fact that she wants to let even more refugees into this country than Obama without a STRONG vetting system in place, I have little doubt Clinton will keep me and my loved ones safe.

Trump..I have no experience with his actions as far as terrorists go. I know he has a bold take no &&&%# attitude. That I have seen.

My vaping, government can stay out of that and I can make my own decisions. I do not need the government to protect me with that, I can do it myself.

Terrorists.... I can not protect myself and loved ones from this. I have to rely on a good strong leader in Government for this.

Sure I vape and I vote but vaping will not keep me and my loved ones safe from terrorists.

 

[Rossum]

I am on disability and do not file taxes, Rossum. What does this mean to me?

Well, if they're looking at all of this rationally, it would mean you have little money to spend, and even if you did spend a lot of that little on-line, the amount of tax you owe would be not be worth pursuing.

I got busted on cigarette taxes many years ago when Fast Eddie Rendell went after those of us buying cigs online. This is my concern. .

Right, but that was far easier data for them to get, and what you owed compared to what you spent was far higher than the 6 or 7 percent that would be applicable here.

Well, that and the fact that Pa is running the vaping business out of the state.

Yep -- living proof that the power to tax is the power to destroy.

Hopefully, you are prepared.

 

[Yiana]

I hate seeing what is happening with vaping and the states. Many feared the FDA. I feared both the states and the FDA but many would hear none of it.

Now that it is happening, people are ...... and they should be.

I have never gotten involved with the political back and forth on this forum. I sat back and let others pass it back and forth. I knew politically, vaping was in trouble.

When the deemings came out, I saw many begin the stock up process.

I was around during the FDA court cases and Judge Leon stating it was a tobacco product not drug delivery devices.

When vaping was 'labeled' something other than what it is...VAPING.. I knew we were in trouble I just did not know when it would happen.

If it had been labeled a drug delivery device, we were up the backside.

If it was labeled a tobacco product, we were up the backside.

I knew, politically, it would never be simply 'vaping.'

It would be either a pharmaceutical or a tobacco product. Too much to lose for it not to be 'labeled' one of these two things.

Many are now getting into the I am for Trump, I am for Clinton discussions. ALL based on vaping and which one would take the best course, in their mind, as far as their vape goes.

Some now say they will not vote for Trump because of his VP choice and his stance in Indiana on Vaping.

A few months ago, yeah, I would have voted with vaping on my mind. NOW, with all the terrorist attacks going on, my thought process has changed.

I have just lost some that were very dear to me in the latest attack. I lost 3 very near and dear on 9/11.

This latest attack and loss has jolted me back to reality here.

I can no longer light a candle, show my support and move on with it. I can no longer have the thought of, it want happen here. IT HAS ALREADY HAPPENED HERE and I still fell back into that thought mode.

My stance now is, if I were to go to vote today, vaping would be the last thing on my mind.

I have let my nic need/addiction take control of my thoughts etc where elections/politics are concerned.

I was mad at what they are doing to vaping and I had the mentality of, vote them all out.

Now, with the terror going on, my mentality has been brought back to reality.

It does not matter what mod, tank, flavor, mg of juice or how much it cost me...THAT vape set up in my hand will not protect me from being gunned down, blown to bits or plowed down as if I were a wild animal standing at a event.

I have come to realize the past few days, I MYSELF can control my nic need/addiction.

It was MY choice to begin using nic in the first place 30+ years ago.

Nic delivery I can take control of and keep myself going with the LUXURY of getting my nic fix.

I can stock up if I wish, I mean, we knew this was coming. I can protect myself from the taxes if I wish to do so.

My friends did not have the chance to protect themselves from a terrorist plowing them down on a sidewalk/street a few days ago.

THEY HAD NO CHOICE. With vaping I do have the choice. Stock up or pay the taxes to continue my LUXURY in life.

I call it a luxury because I have an addiction. But then, if I were not addicted, I would be vaping low mg for health reasons as well.

For my health reasons, if I did not have vaping, I would NOT go back to smoking. I would use snus instead.

BUT, my addiction is worse than the health so therefore, I consider it a luxury. I could easily use all natural supplements, bypassing pharmaceuticals, for the health issues if need be.

I realize others can not/will not take this path for health conditions. That is their choice. My post here is MY choice.

Yes, my mentality has changed.

Vaping is not EVERYTHING in my life and during these times with all that is happening, I have been slapped with reality.

At this point, I will not be voting with vaping anywhere in the equation when it comes time to vote.

What I will be voting on is, will Trump help keep me and my loved ones safe from terrorist or will Clinton.

Being that Clinton did not protect our Ambassador or others, lied about it and covered things up to save her own backside. Add to the fact that she wants to let even more refugees into this country than Obama without a STRONG vetting system in place, I have little doubt Clinton will keep me and my loved ones safe.

Trump..I have no experience with his actions as far as terrorists go. I know he has a bold take no &&&%# attitude. That I have seen.

My vaping, government can stay out of that and I can make my own decisions. I do not need the government to protect me with that, I can do it myself.

Terrorists.... I can not protect myself and loved ones from this. I have to rely on a good strong leader in Government for this.

Sure I vape and I vote but vaping will not keep me and my loved ones safe from terrorists.

I agrer with what you said about the most important issue facing the country. To me Pence being VP will not effect Trump's policies of less regulation and promoting America's businesses. So I am not worried in the least bit about Pence being VP.

Voting about vape issues I believe is more on a local and state level. There are huge issues at hand with the Presidency.

 

[TravelinGirl]

I agrer with what you said about the most important issue facing the country. To me Pence being VP will not effect Trump's policies of less regulation and promoting America's businesses. So I am not worried in the least bit about Pence being VP.

Voting about vape issues I believe is more on a local and state level. There are huge issues at hand with the Presidency.

I wish I could like this 1,000 times.

If one is not happy with what is happening within their state, vote them out.

State vaping laws are just that...STATE vaping laws.

Yes, I agree as well, that Pence will not affect Trump's policies and Clinton's VP will not affect hers.

This country is in trouble and danger. We do not need someone who has been proven to lie to the American people or tell them what the 'want' to hear just so they get into the office they desire. THIS is why we are in the shape we are in now. LIEING AND CHEATING to get their preferred office seat.

 

[bnrkwest]

From the NW Taxation and Revenue frequently asked questions page :
What is the purpose of compensating tax?
Compensating tax helps to eliminate unfair competition from out-of-state businesses. It levels the playing field when New Mexico buyers buy property, services, or some combination of property and services from out-of-state sellers who otherwise have no gross receipts tax obligations to New Mexico.

Look under customer responsibility: New Mexico Internet Sales Tax | Nolo.com

Yes that is for businesses selling online to NM customers, it does not apply to other state sales. Say you have an Ebay store and sell to other states, you don't collect sales tax Unless you sell to a NM resident, then you collect sales tax.

 

[Jerry J]

I had the opportunity to go to Hazleton, PA back in early May. This was the first time I had been to PA.

I found Hazleton to feel a little depressed as many business and restaurants were closed or boarded up. I had quite a bit of spare time so I was staying close to a shop called Penn Vape so I stopped in for a visit to check things out. They didn't have much stock as they were getting ready to move to a new location. The brothers that owned the store were extremely nice guys. It was great to talk vaping. The next day I had time to explore the other shops that came up on Yelp. The next shop was equally nice but had a lot of stock. I bought some accessories and a bottle of Pitbull juice. I decided to go to the next shop which was very close to what I thought was the center of town. This shop was a shopper dream. The stock selection just blew away what one finds in the Portland, OR area! I got to actually see in person what is typically only seen online. The guy that worked there was a really nice guy with no attitude. If I ran a vape business this is what I would envision as the perfect setup. The guy there told me that I needed to visit Alluring Vapor as the typically stock some very high end stuff. I went to Alluring and was blown away. I wouldn't say that they were the friendliest there. The juice selection was insane! I recall that a guy there told me that they currently stocking over 70 lines!!! of juice. And the plan was to get to 100 lines. So the bottom line was even though the town seemed like it had seen better days, the vape shops seemed to cater to high end vapers as well as the beginner.

Two notes: I was there when Penn State was out of session so the town might have been a bit more bustling when school was in session.
Also, interestingly enough, I had mentioned, in one of the shops, that the inventory seemed quite large. The guy there told me that the people that owned the shop also own several successful cigar bars in the area. Since somebody had mentioned that cigars seemed to be exempt from any wild taxation.

This is all really sad and I am so sorry for the folks in PA. I can just see the "copy and paste" being done in other states very soon.

 

[mostlyclassics]

If you don't mind snow Michigan is a wonderful state

We come from Chicagoland, so we don't mind snow at all. It's just one of those facts of life. Hillsdale's climate is a few degrees warmer in the winter and a few degrees cooler, though more humid, in the summer.

 

[Bdnick51]

This is desperately sad. The State of Pennsylvania has just passed a bill which places a 40% tax on the wholesale price of vaping products sold in the state.

Significantly, this includes a "floor tax" meaning that the day after the bill is enacted, each vape store must pay the state a sum equal to 40% of the value of all inventory currently held by that store.

Put simply, most vape stores will not be able to pay this, and will shut up shop.

It's hard to imagine why Pennsylvania would do this. The tax clearly won't bring any significant revenues if stores close and vapers buy their product out of state via online and interstate purchasing. It looks to me like a move to purposely shut the stores down.

It's also yet another wake up call for vapers everywhere. If you're not a member of CASAA, please join so you can get a heads up on any action concerning your state. In a matter of weeks we've witnessed the closing down of the vape industry in two US States. It's doubtful they'll be the last.

EDIT: Chris Hughes (a great guy) from Fat Cat Vapor Shop wrote on Facebook:

Thats crazy.

 

[bnrkwest]

I had the opportunity to go to Hazleton, PA back in early May. This was the first time I had been to PA.

I found Hazleton to feel a little depressed as many business and restaurants were closed or boarded up. I had quite a bit of spare time so I was staying close to a shop called Penn Vape so I stopped in for a visit to check things out. They didn't have much stock as they were getting ready to move to a new location. The brothers that owned the store were extremely nice guys. It was great to talk vaping. The next day I had time to explore the other shops that came up on Yelp. The next shop was equally nice but had a lot of stock. I bought some accessories and a bottle of Pitbull juice. I decided to go to the next shop which was very close to what I thought was the center of town. This shop was a shopper dream. The stock selection just blew away what one finds in the Portland, OR area! I got to actually see in person what is typically only seen online. The guy that worked there was a really nice guy with no attitude. If I ran a vape business this is what I would envision as the perfect setup. The guy there told me that I needed to visit Alluring Vapor as the typically stock some very high end stuff. I went to Alluring and was blown away. I wouldn't say that they were the friendliest there. The juice selection was insane! I recall that a guy there told me that they currently stocking over 70 lines!!! of juice. And the plan was to get to 100 lines. So the bottom line was even though the town seemed like it had seen better days, the vape shops seemed to cater to high end vapers as well as the beginner.

Two notes: I was there when Penn State was out of session so the town might have been a bit more bustling when school was in session.
Also, interestingly enough, I had mentioned, in one of the shops, that the inventory seemed quite large. The guy there told me that the people that owned the shop also own several successful cigar bars in the area. Since somebody had mentioned that cigars seemed to be exempt from any wild taxation.

This is all really sad and I am so sorry for the folks in PA. I can just see the "copy and paste" being done in other states very soon.

Hazelton felt a bit depressed in '79 too when I visited LOL Cool that had good vape shops tho!

 

[bnrkwest]

I started a thread about vape shops closing so we can keep track, if you know of any in your area please post them under General - Vape Shops Closing..... A tribute to our vendors Vape shops closing .....a tribute to our Vendors

List store name, date of closing, city, state and how many employees if known.