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Boat sales tax problem...$$$$ RESOLVED! $$$$

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Boat sales tax problem...$$$$ RESOLVED! $$$$

Old 08-16-2011, 06:38 PM
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Default Boat sales tax problem...$$$$ RESOLVED! $$$$

Bought my boat brand new from a dealership in PA in September of 2009, financed the boat. At the time, the fellow I was dealing with, who is the owner of the dealership, asked me if I wanted to include Texas State sales tax in the deal. I told him I did want to do that so he proceeded to figure it in the financed amount and then I would get those funds so I could pay the sales tax and registration when the boat arrived in Texas.

Boat arrives in Texas, I take all my paperwork to the Texas Department of Wildlife and write a check for the taxes and registration on two motors and a boat...was so excited I never thought another thing about it.

Fast forward to today...About to sell the boat and as I was sorting through the boat file, determining what paperwork goes to the new owner and what I should either shred or keep, I realize that I paid the sales tax twice, once to the state and once to the dealer except the dealer never gave it back to me.

The amount is over $4000....Can anyone tell me how to handle this??????

My first thought was to just call the dealer and say "hey, remember me...yada yada yada...I think there was some paperwork on your end regarding the sales tax that may have slipped though the cracks"

Help on this on is GREATLY appreciated!!!!!!

Last edited by freedbaby; 09-20-2011 at 06:34 PM.
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Old 08-16-2011, 07:02 PM
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Yes, that is really the only thing you can do. Hopefully you have all your paperwork and the person you dealt with is still there. They owe you the money, so hopefully they will acknowledge the error and make good. Your deal with them in actuality has nothing to do with sales tax. You merely agreed to overpay for the boat so they can rebate some of it back to you. (So you could pay interest on the tax money! Yikes!) They should have given you that check back immediately when they delivered you the boat. If you had the money in the bank to pay the state of TX, it was probably not the best plan to finance it.
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Old 08-16-2011, 07:02 PM
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I am by no way an expert, but I would handle this just like the purchase of a new auto in PA and registering it in TX . I would contact the division of sales tax in PA and request a refund form for the sales tax paid in PA, you will need to provide them with the proof that you paid the sales tax in TX, and providing the boat was new I think you will be able to recover the PA sales tax paid. It would be the responsibilty of the dealer in PA to forward the tax you paid in PA to them.
Hope this helps, good luck.
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Old 08-16-2011, 07:15 PM
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Originally Posted by jcwiza View Post
If you had the money in the bank to pay the state of TX, it was probably not the best plan to finance it.
100% correct but at the time I was thinking well its just like a car...all is taken care of in one place.

Originally Posted by MARK ARDENTE View Post
I am by no way an expert, but I would handle this just like the purchase of a new auto in PA and registering it in TX . I would contact the division of sales tax in PA and request a refund form for the sales tax paid in PA, you will need to provide them with the proof that you paid the sales tax in TX, and providing the boat was new I think you will be able to recover the PA sales tax paid. It would be the responsibilty of the dealer in PA to forward the tax you paid in PA to them.
Hope this helps, good luck.
the line item for the tax says, Texas State Sales tax...I didn't pay PA sales tax.
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Old 08-16-2011, 07:25 PM
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How was it broken down on your contract?
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Old 08-16-2011, 07:29 PM
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You bought it from Towne Marine, right? Sounds like they forgot to issue you a check for the TX sales tax amount. They're supposd to be a good outfit, I'm sure they will make it right. I'm surprised their bookkeeper didn't wonder why they had the overage in their account.
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Old 08-16-2011, 07:53 PM
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Originally Posted by gf View Post
You bought it from Towne Marine, right? Sounds like they forgot to issue you a check for the TX sales tax amount. They're supposd to be a good outfit, I'm sure they will make it right. I'm surprised their bookkeeper didn't wonder why they had the overage in their account.
I wasn't going to mention it until I knew how it was going to be handled but then I realized it wouldn't take a genius to figure out.

There is a line item on my sales slip that says "Texas sales tax" and the dollar amount next to it.
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Old 08-16-2011, 08:01 PM
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If you financed the sales tax and the contract states 'Texas sales tax $xxx' then they should have paid the tax or they ripped you off. I would request a receipt from them that indicates they paid the Texas sales tax on your behalf or your money back. If they can prove they paid it then it seems providing the document to the Texas Tax authority should get you your money back...or am i missing something??
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Old 08-16-2011, 09:30 PM
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I would get moving on this pronto. I have no clue what Pennsylvania's statute of limitations is regarding filing this type of claim but two years is definitely a possibility.
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Old 08-17-2011, 03:34 AM
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Have you been able to check with the sales tax folks in Texas to determine whether the dealer actually paid the tax when you bought the boat? It may be that you need to deal with Texas.
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Old 08-17-2011, 03:47 AM
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Originally Posted by gf View Post
You bought it from Towne Marine, right? Sounds like they forgot to issue you a check for the TX sales tax amount. They're supposd to be a good outfit, I'm sure they will make it right. I'm surprised their bookkeeper didn't wonder why they had the overage in their account.
I was thinking the same thing about the bookkeeper. He/she should have picked up on it and sent you your money. Out of state dealers usually do not pay sales tax on your behalf unless they register it for you. I would make a call ASAP.
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Old 08-17-2011, 04:59 AM
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wouldnt the bill of sale have been necessary to pay the tax in texas?...and wouldnt it have itemized texas state sales tax on it?...and shouldnt the people collecting the tax in texas caught this and recommended you check with the dealer?...

the dealer is catching an awful lot of flack here and they may not be the one who failed...considering the op paid the tax twice before he even realized it it seems there are quite a few people not paying attention to the transaction and paperwork...
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Old 08-17-2011, 07:41 AM
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I realize that I also let this slip through the cracks but I don't think that means that I am not still owed the money.

Put in a call to them this morning, I didn't make a big deal out of it and neither did they...they simply said "ok, no problem we will research it" which I expected.

Hopefully this goes smooth.
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Old 08-17-2011, 09:17 AM
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Is there a sales tax charge shown on your sales agreement?

If so, was that tax amount included in the amount you financed?

If so, the dealer probably kept the money. They would have not paid your PA sales tax because they were aware that you were registering in TX and not liable to pay PA tax.

If for some reason they did pay your tax to PA, which I doubt, PA owes you the money after you prove to them that you paid in TX.

I'd be all over the owner of the dealership on this one.
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Old 08-17-2011, 09:22 AM
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fwiw Towne has a very good rep around these parts - and beyond - so at least you have that on your side.
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Old 08-17-2011, 09:34 AM
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A selling dealer cannot collect sales tax for a state that he doesn't do business in.

Last edited by jack14; 08-17-2011 at 12:47 PM.
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Old 08-17-2011, 10:26 AM
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If you can't get the $ back from the dealer, find a good Texas CPA who has dealt with sales tax issues before. How you go about getting your taxes refunded depends a good deal on the particular state. What works in one state won't work in another. Someone who deals with the sales tax people in your state on a regular basis can get the job done with a minimum of hassle and delay. If you can't find someone, PM me, I'll find someone to help you.
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Old 08-17-2011, 10:30 AM
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Make a written request ASAP because you are probably looking at some statute of limitation issues for making a request.
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Old 08-17-2011, 11:06 AM
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I am a tax attorney in Michigan so I can't speak to Texas or Pennsylvania law specifically, but. . . . Best case scenario is the dealer sends you a check. If this does not happen quickly (see my above post) you need to find out where the boat was technically delivered. Was the shipping contract FOB Pennsylvania or Texas? Who paid the shipping company? Who held the risk of loss during shipping?

There are two scenarios. If the boat was "delivered" in Pennsylvania, Pennsylvania is entitled to collect and keep the tax and Texas would credit you for the tax paid to Pennsylvania when you register. It looks like Texas is a 1/4% higher in most areas than Pennsylvania so you would have to make up only the difference to register in Texas.

If the boat was delivered in Texas then Pennsylvania has no claim on the tax and should not receive anything. Further, assuming the dealer has no physical nexus with Texas, the dealer has no obligation to collect or remit taxes to Texas.

My guess (assuming the dealer is honest) is that the dealer paid Pennsylvania, you paid Texas and who owes you $4,000 will be determined by where the boat was technically delivered. . . . Get a copy of that shipping contract.

I will say it again, timing may be critical. Both a potential claim against the dealer or a claim for refund from one of the states will have "expiration dates" and two years is a common figure for such dates. I would hate to see you lose the money because of a SoL issue.
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Old 08-17-2011, 12:29 PM
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Thank you everybody for the advice. The owner wont be back until the end of the week but the information has all been put on his desk. Hopefully I wont need any of this advice and they will just send me whats owed. If it gets ugly I will take one of you up on your offer.

Thank you again for the help
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