This morning the New York Times has an article which I presume the editor solicited because it’s tax season. I wonder what brief he gave the reporter? I’m guessing: “Find an amusing way the rich avoid paying taxes. Don’t make too many waves. I don’t want to deal with the backlash.”
So the article describes a niche scheme for avoiding paying sales tax on your out-of-state purchases. If you move from one state to another the state doesn’t charge you sales tax on your possessions – which seems perfectly reasonable. On the other hand they want to charge you sales tax on things you buy out-of-state. So they need rules. California forgoes the tax after the item is used out-of-state for 30 days.
Rules create games.
The article describes how art buyers avoid the tax by sending their purchases to museums. I guess that counts as use.
I’m required to mention Leona Hemsley famous statement that “Only the little people pay taxes.” which came out after she was convicted of having her jewelry story ship her purchases to her out of state residence. But, sadly, she lacked impulse control. Wanting to enjoy her purchases immediately the store politely arranged to ship empty boxes.
There is a lot of backlash calming and ass covering in the article. If you thinking: “Yeah! I should set up a museum that provides more scalable “use tax” laundering service!” You’ll find some good hints from the one in Portland OR. You’ll need to set up some good procedures to assure you can manage people shipping random crates to your loading dock. You might want to require a longer than necessary “exhibition period” so you have some plausible deniability. But, that said, I can’t see why pretty much any consumer good doesn’t deserve a bit of respectful time on exhibit prior to final delivery. I’ve noticed that Amazon is good at logistics.
Meanwhile, I wonder if any major news outlet will file a tax season article that actually explains the regressive structure of the tax system?
I gather from this posting that if your buying a big boat you should complete the transaction in International waters.