Sales Tax on Equipment?

[dschwarting]

I just got a Dish HD Platinum install with a VIP 622 and (2) 211s.
I was told there was a Sales tax of $75 for the leased equipment.
I live in VA where sales tax is 5% and this equates to purchasing $1500
of equpment.

This tax is being charged by a local installer. (When I called dish they
said HD Locals for Washington DC could be provided on one dish. The
local installer at least knew I needed two dishes)

Does this tax seem correct?

 

[Scott Greczkowski]

Yes it seems correct, while your getting the receiver for free the dealer must pay sales tax on the full MSRP on it, thus you pay that tax.

 

[boba]

If you believe you are being overcharged you can check with your state tax office. In most cases you will find dealers are being honest rather than get in trouble with the state tax office. Each state has different tax laws so I can't really answer for your state.

 

[Scott Greczkowski]

I know a dealer who lost his business because he wasnt charging sales tax because he thought he wasnt selling anything buy giving free equipment. The state came in and made him pay plus all kinds of penalties and they went back YEARS in auditing him.

 

[proelect]

If the equipment in question is DHA leased equipment, DISH retains ownership of the equipment. I only charge sales tax on what ever money actually changes hands to my dealership, usually only the tax on the activation fee. If the customer upgrades th HD and pays the $199 upgrade then tax would be due on that and the activation fee.

Paul

 

[riffjim4069]

There is NO Sales and Use tax on leased satellite equipment nor satellite services in the Commonwealth of Virginia. Several of us were illegally taxed by VOOM DBS for our leased equipment, but our money was later refunded after contacting Cablevision Corporate. (see these posts)

http://www.satelliteguys.us/showthread.php?t=12854&highlight=Illegal+tax
http://www.satelliteguys.us/showthread.php?t=16075&highlight=Illegal+tax

Likewise, Dish Network tried the same stunt when I signed up for service in May of 2005. My money ($13.75) was later refunded after contacting EchoStar Corporate (aka Executive Services) - see these posts.

http://www.satelliteguys.us/showthread.php?t=36051&highlight=tax

Additionally, there will be a flat 5% tax on all satellite services effective 1 Jan 2007 (see these posts).

http://www.satelliteguys.us/showthread.php?t=54162&highlight=tax
http://www.satelliteguys.us/showthread.php?t=58421&highlight=tax

 

[TheForce]

riff.. is probably correct for Va. You must contact your state depart of revenue or local tax authority to determine what taxes are to be charged on leased equipment. In Florida sales tax is charged on all leased equipment but it is to be charged monthly by the lease amount charged. eg.

Under Florida law-
I pay $299 for the first down payment. ~ 7% of $299 = ~ $21.00 tax Rebates, unfortunately do not get tax refunds on lease sales tax unless they are "instant rebates" The way Dish is doing it, we have to pay the full tax.

Then I am supposed to be charged $6.00 per month lease-
7% x $6.00 = $.42 per month.

In addition there is this sales tax on satellite services ( this brings the real bottom line of sales tax to about 11.5%, what Charlie has been harping about for years that cable does not have to pay) but I don't know if this is just for programming or also equipment.

If Dish charges anything other than that I plan to investigate and ask for adjustment if necessary.


Since many states have their own variations of this law, it is very difficult for Dish to know all the rules of each state but if they are caught by you in an illegal taxing procedure they must refund your money or face the rath of your state's Dept of Revenue police if you report them and they are found wrong. In this case they could have fines and penalties in addition to having to deal with the audit hassle, bad press etc..

 

[riffjim4069]

My comments are indeed correct regarding satellite sales and usage tax here in Virginia, which directly answers the original posters question. Dish Network has an obligation to abide by the laws in each state/commonwealth they provide service. That's why they have a small army of lawyers. Ignorance of the law is no excuse.

 

[SimpleSimon]

Yes it seems correct, while your getting the receiver for free the dealer must pay sales tax on the full MSRP on it, thus you pay that tax.

Sorry, Scott, you're wrong on this one.

Ownership of leased boxes bounces between E*, the distributor (if any) and the retailer, then back to E* upon activation. All involved parties need to have sales tax resale certificates, and no sales tax on the boxes to the customer - because they do NOT buy it.

Some states DO charge tax on the lease fees.