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Thread: WTF?

  1. #1

    Default WTF?

    http://www.wsmv.com/story/16773393/state-threatens-suit

    This is one of my designs. I have since written to the governor of Tennessee at their web site here: http://www.tn.gov/help/

    Here is my email to the Gov:


    Governor Haslam:
    One of my customers, Jonathan King, a Tennessee resident, built one of my boat designs in his garage and is now being charged taxes as a dealer. The news media is covering it and it is now going viral on the internet. This is making the state of Tennessee look terrible, and in a time when a huge percentage of the country is angry at out of control government, it is becoming big news. Here is a link to WSMV Channel 4's coverage: http://www.wsmv.com/story/16773393/state-threatens-suit This is a ridiculous abuse of government power. What's next, dealer taxes if you bake your own cookies? Need I publish a warning to Tennessee residents on my web site and on the many internet forums I frequent?

    Respectfully,

    Jeff Spira
    Owner and Chief Designer
    Spira International
    Easy to Build Boat Designs
    http://spirainternational.com
    Jeff Spira


  2. #2
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    Default Re: WTF?

    Nice

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    Default Re: WTF?

    Jeff, I helped build the green drift boat in your picture gallery. It's bounced off every rock in the west branch of the Delaware and keeps ticking. I'm guessing this thread will shortly end up in the Bilge. Guy over on Sawmill Creek posted this along with plenty of comments blaming us lefties. Your design was easy to build and turns on a dime.

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    Default Re: WTF?

    This makes the fourth thread on two different decks on the issue. The real villain of the piece is that in a burst of idiotic "privatization" the state hired a "tax consultant" to find over-looked taxing opportunities. Since they can count it as a win for sending a bill, they are highly motivated to indulge in what's really an abuse of process. We hope that people will realize that this bad idea is not liberal big gov gone crazy but just an example of what happens when you allow private profit businesses to perform government business. Whether the public can must outrage enough to change it remains to be seen.

  5. #5
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    Default Re: WTF?

    Would getting a lawyer and countersuing or what ever lawyer stuff is possible would cost more than the tax?

  6. #6
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    Default Re: WTF?

    This makes the fourth thread on two different decks on the issue. The real villain of the piece is that in a burst of idiotic "privatization" the state hired a "tax consultant" to find over-looked taxing opportunities. Since they can count it as a win for sending a bill, they are highly motivated to indulge in what's really an abuse of process. We hope that people will realize that this bad idea is not liberal big gov gone crazy but just an example of what happens when you allow private profit businesses to perform government business. Whether the public can must outrage enough to change it remains to be seen.

  7. #7
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    Default Re: WTF?

    Quote Originally Posted by Ian McColgin View Post
    This makes the fourth thread on two different decks on the issue. The real villain of the piece is that in a burst of idiotic "privatization" the state hired a "tax consultant" to find over-looked taxing opportunities. Since they can count it as a win for sending a bill, they are highly motivated to indulge in what's really an abuse of process. We hope that people will realize that this bad idea is not liberal big gov gone crazy but just an example of what happens when you allow private profit businesses to perform government business. Whether the public can must outrage enough to change it remains to be seen.
    Nice

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    Default Re: WTF?

    Quote Originally Posted by Ian McColgin View Post
    We hope that people will realize that this bad idea is not liberal big gov gone crazy but just an example of what happens when you allow private profit businesses to perform government business.
    Liberal Big Government? In Tennessee? As a native son of that fine state, I have to say that's the last possibility that would have crossed my mind.
    Last edited by kc8pql; 02-10-2012 at 04:42 PM.

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    Default Re: WTF?

    Ignore them. Or are you saying that a dealer is also a manufacture?

    I use to buy cars, get tired of them and sell them. The state sent me an application as a dealer saying I could not buy more than 3 cars a year. I told them I was not in the business and that I would buy as many ______ cars as I felt like and if they didn't like it I'd be happy to see them in Federal Court. Never heard from them again.

    Let them take an inch, they will try to take a mile!

    Edited: A manufacture is one who is the business of building, this is a hobby and the boat was sold to you, just the plans. I'm pretty sure what the bean counter is missing here is that there must be a business enterpriise to be a dealer.

    I can see too where they are saying they are missing the revenue from something being built that they generally collect fees from, from those who do manufacture such items. The wall they will have is the right of someone making anything themselves that has no commercial advantage.

    I'd be calling the Attorney General and since Tenn is so interested in individual freedoms, this will meet the absurd.....go to court, not likely they will want to set that precedence that individuals can not build something and must purchase things from tax paying manufactures. Sound familiar?
    Last edited by Wavewacker; 02-10-2012 at 04:43 PM.

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    Default Re: WTF?

    I find this push against home building to be quite frightening. I love to build my own things, and dream of being entirely self sufficient. This could get quite hard if the government decides that building something in your garage is the same as manufacturing it in a factory. I doubt this will go much farther, but it should be BASIC COMMON SENSE to protect those who have the determination and inclination to do things for themselves.

  11. #11
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    Default Re: WTF?

    Quote Originally Posted by Ian McColgin View Post
    . . . in a burst of idiotic "privatization" the state hired a "tax consultant" to find over-looked taxing opportunities. . .
    That was my first thought when I saw the first of these threads this morning.

    Wayne

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    Default Re: WTF?

    The real culprit here is the privatization of necessary government functions. Where there is a profit motive, there will be the urge to make profit. Locally, we have private for profit prisons. Can anyone see a motive for getting more people in prisons? Or the avenue for kickbacks to arresting police or sentencing officials?

    Not the same thing. Don't kid yourself. Ian has it right and railing against too much government is way of base.
    Tom L

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    Default Re: WTF?

    Where I live the government will pay postal workers and others like the utilities companies (gas, electric and phone ) who have to travel throughout the state in performance of their duties, especially in rural areas, to report on anyone who has, say, a few lawnmowers for sale, or firewood for sale and things like this, anything that the state could be collecting taxes on. I think that is a friggin shame. And yes, this thread probably should be in the bilge but that just makes it sound like trash, which it isn't. personally, I don't know where it should be.

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    Default Re: WTF?

    Well there is some progress being made. State Representative Joe Carr thinks it is an outrage. Maybe he'll have the power and the guts to follow through and make things right!

    Posted:

    Feb 10, 2012 8:39 PM MST
    <em class="wnDate">Friday, February 10, 2012 10:39 PM EST</em>Updated:

    Feb 10, 2012 9:09 PM MST
    <em class="wnDate">Friday, February 10, 2012 11:09 PM EST</em>Posted by Nancy Amons - email





    MURFREESBORO, TN (WSMV) - A state representative thought it was a joke when he heard that a father and his young son had been labeled as "boat dealers" because of a small, wood boat they built in their garage.
    The family has been getting letters from the Tennessee Department of Revenue threatening them with court actions, fines and liens if they didn't pay $539 in taxes on their fishing boat.
    Johnathan King and his 7-year-old son Carter spent three weeks assembling the 14-foot boat according to plans they ordered over the Internet. After registering the boat, they started getting correspondence from the revenue department referring to them as "boat manufacturers and dealers."
    State representative Joe Carr didn't believe it when he first heard about it.
    "I initially thought it was a joke, because it was so absurd," Carr says.
    "No reasonable person would believe that Mr. King is in the manufacturing business for boats," he says.
    "Initially, I thought it was an error," King says. After he told the state this was just a small fishing boat the two had built at home, he expected the revenue department would relent, but they did not.
    "To put it politely, I thought it was quite silly," King says.
    Carr says either revenue is misinterpreting the law and taking it to an extreme, or the law needs to be fixed. He meets with revenue officials Monday.
    If their theory holds true, he says, it's a slippery slope.
    "If, as an individual, I go to Home Depot or Lowe's or some lumber yard, and I decide I'm going to build a picnic table for my patio, does that make me a furniture manufacturer?" Carr says.
    Since Channel 4 first reported the story Wednesday, the topic has been widely discussed on blogs across the country.
    "Seems ludicrous," someone from the northeast wrote on woodenboat.com. "Can't be a manufacturer or dealer if you're not making the product for sale."
    The Department of Revenue issued a statement after we asked them for three days to explain their position.
    "It is not the Department's position that an individual who builds a boat from a kit or component parts is in the business of selling boats," write communications manager Billy Trout.
    The statement says the term"dealer," which is used in the tax statutes, also refers to a purchaser. They regret if information from the department was confusing.
    The revenue department's statement explains that state statutes protect taxpayer privacy, and therefore, they cannot discuss tax matters involving particular taxpayers.
    "We would like to provide some general information about use tax and boats," the statement says.
    "Generally, sales tax is collected by the seller when an item, such as a boat, a boat kit, or component parts, are purchased. Sometimes, such as when the item is purchased outside the state, the tax is not collected by the seller. In those cases, the purchaser must pay, under state law, a "use tax" on the item. Use tax is equal to the sales tax that normally would have been collected by the seller. The purpose of use tax is to ensure that all purchases are taxed alike, whether bought from a seller in Tennessee or outside the state.
    "When a boat is registered, the boat owner is required by law to document that sales or use tax was paid on the price of the boat. If the boat was built from a kit or other component parts, the owner must show that sales or use tax was paid on the kit or parts. Receipts or invoices are acceptable proof, as are records that show the taxpayer paid use tax directly to the Department of Revenue. When no information is provided, the Department must determine whether tax is due."
    King says he's pulling together invoices and receipts for all the building materials used in the boat, but it's difficult, since some materials were purchased as much as three years ago.
    He says he's absolutely not a boat dealer, and would never sell the boat, which he considers an heirloom to be passed on to his son's children some day.
    "It ought to last 30 or 40 years," King says.
    "We must now defend ourselves as dealers. I'm still trying to get my mind around the docket, 'Tennessee Department of Revenue vs. Carter King, 7 years old,'" King says.
    Copyright 2012 WSMV (Meredith Corporation). All rights reserved.

    http://www.wsmv.com/story/16912107/r...j-mdg.facebook
    George

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    Default Re: WTF?

    This is an outrage and a prime example of laws being taken way beyond their intended context. Unbelievable!

  16. #16
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    Default Re: WTF?

    Quote Originally Posted by J. Spira View Post
    http://www.wsmv.com/story/16773393/state-threatens-suit

    This is one of my designs. I have since written to the governor of Tennessee at their web site here: http://www.tn.gov/help/

    Here is my email to the Gov:


    Governor Haslam:
    One of my customers, Jonathan King, a Tennessee resident, built one of my boat designs in his garage and is now being charged taxes as a dealer. The news media is covering it and it is now going viral on the internet. This is making the state of Tennessee look terrible, and in a time when a huge percentage of the country is angry at out of control government, it is becoming big news. Here is a link to WSMV Channel 4's coverage: http://www.wsmv.com/story/16773393/state-threatens-suit This is a ridiculous abuse of government power. What's next, dealer taxes if you bake your own cookies? Need I publish a warning to Tennessee residents on my web site and on the many internet forums I frequent?

    Respectfully,

    Jeff Spira
    Owner and Chief Designer
    Spira International
    Easy to Build Boat Designs
    http://spirainternational.com
    Well done. Well damn done. This is the only really useful course of action to take in cases like this; attack the source directly. Venting our displeasure amongst ourselves may feel good, but is ultimately rather impotent. I have emailed the governor myself and encourage all others to do the same. Here's a copy of my letter:

    Dear Governor Haslam,

    I'm an amature boat builder and user. I've recently become aware of a situation in your state wherein a private party, a one Johnathan King, is being unjustly handled by the Tennessee department of revenue. Mr. King built a small boat for his own use and to share and enjoy with his 7 year old son. The state dept. of revenue has apparently classified him as a "dealer" and is trying to impose taxes on his boat as if such were the case. The unveiled absurdity of this is obvious and if the facts as I read them are accurate, this situation needs to be corrected immediately. The portents of this action are ominous. If I repair a broken window in my home, am I now a professional carpenter? If I bake a cake for my daughter's birthday, am I a professional baker? With intent to sell? You would be doing your state and the country in general a great favor if you could put your weight into investigating and amending this seeming injustice. I appreciate your time.

    Best regards, etc..
    Last edited by Gold Rock; 02-11-2012 at 11:44 AM.
    Chuck Hancock

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    Default Re: WTF?

    Here are some other useful links:

    email: Bill.Haslam@tn.gov

    facebook: http://www.facebook.com/home.php#!/TeamHaslam?sk=wall
    Chuck Hancock

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    Default Re: WTF?

    Often you hear the rest of some crazy story you realize it wasn't that crazy but I can't believe this guy has got to track down receipts for plywood and epoxy. Haven't seen the boat but the tax could exceed the cost of materials.

  19. #19
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    Default Re: WTF?

    Quote Originally Posted by Ian McColgin View Post
    The real villain of the piece is that in a burst of idiotic "privatization" the state hired a "tax consultant" to find over-looked taxing opportunities. Since they can count it as a win for sending a bill, they are highly motivated to indulge in what's really an abuse of process. We hope that people will realize that this bad idea is not liberal big gov gone crazy but just an example of what happens when you allow private profit businesses to perform government business. Whether the public can must outrage enough to change it remains to be seen.
    In some respects this situation reminds me of the adoption of the universal building code as "law"
    Those codes were written and lobbied into law by the related industrys (insurance, among others) to maximise profits, with the dubious added attraction that the building would be "safer" (and there is some merit in that, but there are plenty of "safe" homes built long before any "building codes" were ever written.)
    I suspect that next up will be a uniform building code for boats, starting with materials. Only man-made materials will be allowed. Stitch and glue would be out of the question. Carvel? never, Cross planked bottom - OMG!

  20. #20
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    Default Re: WTF?

    Quote Originally Posted by Canoeyawl View Post
    In some respects this situation reminds me of the adoption of the universal building code as "law"
    Those codes were written and lobbied into law by the related industrys (insurance, among others) to maximise profits, with the dubious added attraction that the building would be "safer" (and there is some merit in that, but there are plenty of "safe" homes built long before any "building codes" were ever written.)
    I suspect that next up will be a uniform building code for boats, starting with materials. Only man-made materials will be allowed. Stitch and glue would be out of the question. Carvel? never, Cross planked bottom - OMG!
    You're bumming me out. Paralam keels, Trex planking, 3M 5200 caulking, injection molded plastic fittings. Yikes.
    Chuck Hancock

  21. #21
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    Default Re: WTF?

    There already are standards for boat building. Mostly rational but every now and then a set of regs would displace traditional craft and needs to be fought. We all should remember the heroic efforts of John Gardner in the '70s that made what we do in our homes and garages still legal.

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    Default Re: WTF?

    from what I read on this so far it seems they are looking for the equivalent of the sales tax on the kit that was purchased. I am unclear whether this was purchased as a kit or just a set of plans. if you paid for the plans and paid sales tax at that time I would say you are in the clear as all of your other parts that were purchased locally would have to have sales tax paid on them. $500+ dollars for taxes on a boat built in 3 weeks seems a bit optimistic though.
    so the question for me is whether local required tax was paid on the plans or the kit involved.
    Freudian slips : when you say one thing but mean your mother.

  23. #23
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    Default Re: WTF?

    I predict that this will all be worked out, sooner or later, particularly with the glare of national publicity. What's obviously happened is whoever wrote the law, and those who passed it, had no thought that people actually build things from scratch in their garages for their own use. What's probably going to happen is a hobbyist exemption from the dealer tax. You'll still need to show you built the boat yourself and payed sales tax on the materials though. It's already like that in many, or even most states now. I had to do that here in Ohio to get the HIN and title for Alaya. The title listed her as "homemade". Of course, when they saw the ten inch high stack of invoices I had, nobody bothered to go through them to check where the stuff came from.
    Last edited by kc8pql; 02-11-2012 at 05:45 PM.

  24. #24
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    Default Re: WTF?

    from what I read on this so far it seems they are looking for the equivalent of the sales tax on the kit that was purchased...
    It's not about sales tax, the boat was not built from a kit is was built from a set of plans. Regardless of what is was built from it is not really any of their buisiness where the materials came from. I know a lot of states are doing this (not mine currently) and it's wrong in all of them. If I buy an accessory for my truck and I get it online should I have to pay extra when I go to renew my license plate? If they want to collect sales tax on internet sales then they need to set something up so that everyone pays sales tax on everything. If not then they need to not selectively charge certain hobbies and not others! It's all a bunch of BS where government has gotton way more power than we ever should have given them!
    George

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    Default Re: WTF?

    i would suggest that it IS about what the taxes paided, looks like. when time to register the boat, the maker can't prove that he/she paid ligit sales tax on the mat'l used on the boat then one could logcally assume that the material was bought tax defered- taxed deffered is mostly used by mafg'ers. if you show up at the registars office without the recips in hand to prove you're a home builder,you're going to have a rough time of it. if boat mat'ls were accidently bought along with farm supplys or builder goods, useing a tax number is just as bad
    Last edited by the_gr8t_waldo; 02-11-2012 at 07:43 PM.

  26. #26
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    Default Re: WTF?

    He recieved the letter several weeks after going through the registration process. Hell the boat was on it's second outboard already before he was told that he is now a dealer and must pay "extra" taxes. I guess we'll see what conclusion they come to Monday when Representative Carr meets with the department of Revinue.

    I'm done with the thread until I get more info. My opinion doesn't matter, nor will it change the issue at hand.

  27. #27
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    Default Re: WTF?

    I'm not a supporter of big brother having ever-increasing power, but here's what I've seen in my little corner of the world:

    -Sales taxes are down, due to the slumping economy
    -Property taxes are down due to declining real estate values
    -Government cannot shrink its overhead structure as easily as private business
    -Property tax increases are a political time bomb right now
    -Folks that work for the government are just as capable of acting in their self interest as the rest of us- in other words, they'll do whatever's necessary to save their jobs

    Ergo, local and state governments are turning over every rock they can find in search of additional revenue. My municipality has begun enforcing fees and fines that have been on the books for decades, but never enforced or collected.

    The conspiracy theorist in me wants to blame it on an expansion of big government, but that's just a small part of the equation.

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