Tax or write-off when buying a rig?

[brett.mayfield]

Hey yall

 

Im about to purchase a rig from Tiffen and I live in Los Angeles. If I buy it with my Los Angeles address then I will be charged a stupid amount of tax. I have family in Georgia and was thinking about just doing it through them.

 

If I have a family member purchase the rig in Georgia and I then purchase it from them, can I write this off as a businees expense? I have read through the posts in the Legal/Business Practices and have seen just a little about Use tax...does this come in to play?

 

Any details on the most economical purchasing procedures would be helpful.

 

have a rad one

 

brett.

[Rob Vuona SOC]

Congrats on your purchase or future purchase

 

But if you live in LA, just tell them that you want it to be done with California Production Tax instead of the current sales tax. They have the paperwork there. Its 3 or 5 percent instead of the 9 percent. As long as your living and using it in California your good.

 

 

Hope that helps

 

JM2C

[Bill McClelland SOC]

i think you can still purchase it as long as it ships out of the state then you dont have the tax issue. Just use their address to be shipped to.

[Alan Rencher]

I've heard of people being busted for shipping out of state to avoid taxes. Technically, you still have to pay Use Tax on it. I think getting the production tax rate is the best way, but Bill has been in this business way longer than I have.

[Michael Maga]

You can ship it out of state to avoid paying taxes...however the item is suppose to be used out of state as well, and many companies will have you sign a statement that it is for out of state use.

[Eric Fletcher S.O.C.]

You are opening yourself to some serious tax issues if you try to then depreciate the item later. California WILL cross reference your part 179 federal depreciation.

 

Now if you have a legitimate address out of the state and claim that as residency you can do that as long as Tiffen doesn't have a authorized dealer in that state.....

[Lawrence Karman]

It's all a matter of if you get caught. If you buy it here you are supposed to pay the sales tax. Technically you are not eligible for the 3%production tax rate; that was intended for post production and television studios. GPI would not give that to Steadicam ops in the past (I'm not sure what they do now) but if Tiffen is willing that would be a savings. They might be willing to ship it out of state with you paying directly. Some companies won't do it. But here's the thing: if you don't pay tax in California now you are required to pay Use Tax on out of state purchases that you use in state OR you can register with the California Board of Equalization and charge sales tax when you rent your Steadicam. Much paperwork and unhappy clients. It's really a matter of whether you get audited and caught, then you will have to pay penalties and interest but probably no jail time, hehe. Also California is being very aggressive in collecting Use Tax and LA County in collecting Business Tax based on a percentage of your sales. They need your hard earned $.

The tax you might pay IS deductible when you depreciate the entire cost of your business purchase (whether you do it all at once or spread it out over many years)

One thing I did hear anecdotally was if you use the purchase that you bought out of state on location in another state within 3 months of purchase you do not have to pay the Use Tax. Nut sure if it's true but you could call the BOE to confirm.

 

Eric, we all know you are a fine operator and I enjoy reading your posts. Unless you are getting points from Showtime, is it possible to see them without having to look at giant Dexter YouTube links? No need for self promotion here; we're not hiring.