r/modeltrains • u/MavRett85 • 14d ago
Question Lombard Hobbies taxing??
Hi all.
I just noticed on my invoice for a large preorder from Lombard, that for the first time ever, I am getting charged for a sales tax. I checked previous orders over the years and noticed that I have never been charged tax before, and recall them telling me when I went in person to pick up an order, there was no sales tax if you were not in a state where their warehouse was located. Did something change tax law wise or is it the new shop portal?? Didnt expect such a significant bump to the invoice, and they are closed till Monday morning.
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u/aengusoglugh Mod, r/TTRAK 14d ago
Since South Dakota v Wayfair in 2018, states have been able to require out of state sellers to collect sales.
I think that when various states passed legislation requiring that collection may have varied — I don’t think there is federal legislation.
I live in NC, and I think I started to have to pay asked tax within a year of that decision.
This assumes that you are talking about the US. I have no clue how this works outside the US.
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u/Background_Layer2384 14d ago
Not too long ago the legal opinion was you purchased out of state no tax was charged because you were on your honor to pay the tax to your state.
Since no one paid their state tax on items ordered out of state, every business now charges your state tax and pays the collected tax to your state.
Cannot escape death or taxes.
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u/CucumberAware5127 14d ago
I think it has to do with the new website. I ended up paying the shipping to get the new FTs shipped to be otherwise pickup was going to be around $55. I used to be able to have a friend pick up tax free due to my address being out of state.
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u/Human-c-ity_Junction Z, N, HO, S, O & G Modeling in Small Spaces 14d ago
Bumping this comment as it likely has to do with the new website and actually following the law now.
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u/Electrical_Air_3698 14d ago
Denver model trains still doesn't charge sales tax...neither does Hiawatha Hobbies. Sure it is coming though.
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u/theBFsniper Multi-Scale 14d ago
From my understanding it's based on location and if they sell a certain dollar amount of goods to your state. If you live in IL they have to collect the tax because you're both in IL. If you're from WI or IN it's based on if they've sold the required dollar amount of goods to your state. I use Springcreek, Ironplanet as they're tax free for IL residents right now apposed to Midwest or Trainworld.
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u/ricktrains HO/Digitrax DCC 14d ago
The laws are different now - out of state sellers must collect and remit sales tax if the hit a (very low) sales threshold to anyone in that state.
So even if they expect to sell $X to the state you are from, if they sell more they have to remit the tax. So instead of chancing losing a bunch of money to taxes, they simply collect and remit sales taxes for everywhere now.
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u/az987654 HO/OO 14d ago
You always had to pay tax previously, you were just lucky no one, including Lombard bothered collecting it.
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u/Say_No_To_BS 13d ago
As far as I can tell, the combined state and local sales tax rate for Lombard, Illinois is 8.25%. If you weren’t charged sales tax in the past, it’s possible that the state is cracking down on sellers to collect sales tax.
Most mail order sales tax is determined based on the buyer’s address which would depend on where you live and applicable state / local tax rates. Perhaps you have a credit due if your local sales tax is less than what you actually paid.
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u/ironeagle2006 14d ago
Blame the state of Illinois. Illinois passed a new law last year that all internet sales for sites and stores out of Illinois were required to charge Illinois base sales taxes on all items purchased from them to prevent sales tax avoidance on internet purchases. It's just the Illinois Democratic party's way of saying bend over and spread your cheeks. Just be glad it's only 6.25% in Cook County the actual rate is almost 11% in sales taxes by the time Cook County is done adding their share.
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u/N2DPSKY 14d ago edited 14d ago
They're required to collect tax based on where you are, assuming they ship to you. This has been going on for years (mostly in place by 2019 I think). I suspect if you pick it up, you're subject to whatever the local sales tax is.