Doubt I will be ordering from Digi-Key again

Discussion in 'Off-Topic' started by spinnaker, Nov 26, 2009.

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  1. spinnaker

    Thread Starter AAC Fanatic!

    Oct 29, 2009
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    Not exactly sure where this belongs. Hope it is OK to put it here.

    I just placed an order with Digi-Key and to my surprise they charged me sales tax! I understand that they have been doing this for some time now. I did some searching and there are a lot of complaints on the various forums.

    Digi-Key does not have a physical presence in PA and therefore should not be charging sales tax. I read one post where they gave someone the baloney that they have representatives that visit customers in every state in the US so therefore they have to charge sales tax.

    They sure better be sending the tax off to the respective states.

    In addition, they don't tell you what you the cost of shipping! I have never dealt with a company that did not tell you your shipping costs pn ordering.

    I just got started back into the hobby and probably won't be ordering all that much for starters but what little business I have will go elsewhere.
     
  2. spinnaker

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    BTW I am aware there is a "shipping estimator" but I don't know the exact weight of the product but Digi-Key certainly should!
     
  3. SgtWookie

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    Jul 17, 2007
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    Fine with me - if the Mods/Staff decide otherwise, they'll put it somewhere else.

    Interesting. I haven't ordered from Digikey for a while, but last time I did, no sales tax was charged.

    I know that there was a good deal of talk in various state legislatures about E-commerce, and how much tax money they were losing, since people were buying so many items online from companies in other states, rather than from in-state companies. It may be that your state legislature has passed a law requiring sales taxes be paid for online purchases made from your state, even if the seller is in another state.

    I suspect that would be between them, their accountants, and the respective states. They have to account for all monies going in and out of the company.

    This is more common than you might think. Digikey uses a variety of shipping methods; even USPS 1st Class for SMALL orders, which can save you money.

    Many suppliers won't ship via USPS. However, sometimes people will specify a shipping option that just isn't viable (like trying to ship a large order via USPS 1st Class).

    Rather than cancelling the order, or having to try to track the customer down to get alternative shipping preferences (which would cost lots of time and money) they simply select the closest shipping method they can to what the customer specified. They don't make any money on shipping, and they certainly don't want to annoy their customers by overcharging them for shipping.

    Many vendors won't ship USPS 1st Class. Since they don't, that generally will add about $8 or more to the total cost of your purchase.

    Many vendors also add on a handling charge, and have a minimum order amount. Digikey builds the handling charge into the price of the parts, which is one of the big reasons many of their parts seem to be priced higher than other vendors. Handling charges can bump your costs per part significantly.
     
  4. spinnaker

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    PA has no cross agreement to collect sales tax with anyone state.



    I had to pick the shipping method. They did not give me the option of them picking it for me. So if they know the method I picked and they should know the weight, they should be able to tell me my cost.
     
  5. CDRIVE

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    Jul 1, 2008
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    I've been concerned that this was going to happen. Many states have been petitioning our out of control federal government, protesting loss of sales tax revenue due to mail order companies not located in their state. Who knows what kind of back room deals are being made? What you can be sure of is the feds will get their cut! If Digikey is authorized to collect PA sales tax then they should be able to produce a valid PA Resale Certificate. It's these state certificates that authorize businesses to collect sales tax.

    Harbor Freight collects sales tax from many states because they have outlets in them. I don't think traveling Digikey reps count!

    Anyone with some extra time on their hands should read up on the creation of the Interstate Commerce Commission. It changed everything in the U.S. and should be abolished... fat chance!

    I've been thinking of changing my handle to "DisgruntledTaxpayer". :mad:
     
  6. jpanhalt

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    Jan 18, 2008
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    That's the law. Sales tax is not waived by your state, just because you bought something from another state. Either you should pay it or the seller should collect it. If the seller happens to have a presence in your state (e.g, an outlet), then it must collect the tax. If it does not, then you should by law declare and pay it. I see nothing wrong with obeying the law.

    What I do find unfortunate is the arbitrary and discriminatory way in which DigiKey is required to collect sales tax, but other interstate dealers are not. The reason it does is a result of a lawsuit against DigiKey several years ago. I guess it contributed to the wrong political party or something like that. As a result, it signed a consent decree to start collecting sales tax from all customers located in states with sales tax rather than go though the ruinous cost of that lawsuit.

    Other interstate businesses in Minnesota have not been so vigorously harassed. That is the part that I find repugnant and is one reason I direct a lot of my purchases to DigiKey, despite the tax. I hate to see government power misused in that way.

    As mentioned above, I think the time is not far off when all businesses will have to collect sales tax on interstate business. At lease that will level the field.

    John
     
  7. steveb

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    Jul 3, 2008
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    If you want to avoid taxes, death is always the other option. ;)
     
  8. jpanhalt

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    Retirement by incarceration is becoming more popular too.

    John
     
  9. JoeJester

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    Apr 26, 2005
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    CA has been collecting out of state tax for years.

    When I ordered from digikey when I was in OK, I was charged a sales tax.

    Even though mail order companies may not charge sales tax, if you import personal property that is subject to the sales tax in your state, you should be paying the use tax. Some states have that on your annual tax forms.

    Ultimately you are responsible for the sales tax.

    Wait till the states get access to your credit card purchases so they can reconcile your purchases with the sales tax you claimed on your tax return. Big brother will definately be out of control. People forget the Boston Tea Party was over about a two cent tax.
     
  10. PIC_User

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    Sep 22, 2008
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    Hey, we don’t have to pay sales tax on any mail order or any in state purchase. –Adam-
     
  11. JoeJester

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    Does NH have a use tax on the books as well as a sales tax?

    The two go hand and hand in most states.
     
  12. PIC_User

    Member

    Sep 22, 2008
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    Hi Joe,
    I had to Google “use tax”, because I had never heard of it! NH has no sales or use tax. In fact NH is used as an example in Wikipedia to discuss dealings between states with out a use or sales tax.
    –Adam-
     
  13. Wendy

    Moderator

    Mar 24, 2008
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    Wonder if Texas gets charged one. We are one of the few states left without a Income Tax, and since I get most of my stuff locally...
     
  14. PIC_User

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    Sep 22, 2008
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    Here is a snip from this week’s Digi-Key invoice. I guess they don’t charge NH residents a sales tax.
    [​IMG]

    Oh and by the way NH doesn’t have an Income Tax either! -Adam-


    “Live Free or Die”:eek:
    -Adam-
     
  15. jpanhalt

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    Amen to that. Used to have a vacation home there (Lincoln Station). Great place, no jobs for me though.

    John
     
  16. CDRIVE

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    If I'm not mistaken the NH state motto is "Live Free Or Die" and is the home base of the "Free talk Live" radio show. They're the only state that does remember what the the Boston Tea Party was all about. Texans are starting to grumble again so I guess there's some folks down there that remember too!

    There is absolutely no entity on this earth that is more accomplished at financially bleeding you to death, while at the same time pissing that same money away on asinine projects and 7th grade book keeping, than all our levels and branches of government!

    The tree of liberty is rotting from the top down...
    WAKE UP AMERICA!!
     
  17. beenthere

    Retired Moderator

    Apr 20, 2004
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    Well, this one is way past the edge.
     
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