Rock Auto Online Shipping and local taxes

[FINOCJ]

I am cautiously bringing up an online shipping issue I ran into last night trying to order some parts from Rock Auto - some of you may have already run into this, and those of you that are not in a municipality with a sales tax - it will not have any affect. I am doing this cautiously as mention of taxes is often quickly followed by a discussion of politics and our forum guidelines restrict that discussion, but I think its worth nothing that a large online supplier of auto parts is currently unavailable for some of us.... I trust our membership will value the knowledge but will handle the post discussion responsibly...

I have ordered quite a few things from Rock Auto over the last few years...never had an issue. Go to order something today and get a big red notice saying they cannot ship to my address (same address I have always had) due to some sort of issue with local city sales tax. Get the following notification

Your state forbids us to ship to this address because we are not registered for your city (or other local government) sales tax. (We don't have enough accountants to file and pay taxes directly to cities where we have no physical presence.)

We are registered with your state sales tax authority. Please ship your order to another city (your work? a friend's house?) which relies on the state to collect taxes.

I do live in Denver proper (i.e. the city and county of Denver - not one of the suburbs). We have had local municipal sales tax here for as long as I have lived here. I think the issue stems from a Supreme Court decision back in June (commonly knows as the 'amazon tax' court decision....I am trusting our membership will appreciate the opportunity to do their own research if they desire, but will be cautious of what political discussion, if any, they bring back to the site). I will continue to need parts in the future. So I will continue to comparison shop and see what retailers provide right parts at the right cost with the best balance of meeting my needs be it local FLAPS or online providers. I just find it frustrating to loose access to RA as I find their parts to be very cost effective (although they have absolutely no customer service - so you had better know exactly what you want).

[Brian]

That's interesting, I haven't encountered that yet.

A short article I found about it:

https://www.nolo.com/legal-encyclopedia/50-state-guide-internet-sales-tax-laws.html

[Getaklu]

I am sure this will become more prevalent, you might ship it to a friend outside of Denver.

Per their web site:

[FINOCJ]

RA has said they will not deal with the local municipal taxes (at least for now) - so that will push my business either back to local FLAPS or more to other online sellers like Summit or Amazon. Its not a political statement as just one of practicality - if I can't get stuff shipped to me, it doesn't do any good to buy it. I also get there side of it - as a discount online retailer with what I assume is thin profit margins, managing the tax accounting for municipal taxes may not be worth it to them. I don't really know how many areas across the country have municipal taxes or how many customers RA would potentially be loosing in such areas. Outside of auto parts, this law (which has always been in effect - just not necessarily enforced until the SCOTUS decision) will affect all online retailers. I also understand the city's side as well - they would like their fair share of the tax sales especially given how the increase in tax revenue would help alleviate tight budgets.

It is what it is...but it will probably cost me a bit more in the long run for parts (until I move out of the city) as well as loose access to one of the best parts suppliers around. At least I will still have access to their database online - that gives useful part numbers that can then be used at other suppliers to search for stuff without having a specific make and model application. I haven't ordered anything from Summit recently, so will be interesting to see how they deal with such issues. Additionally, as my previous orders through RA have not had the local sales tax (just state), even if places like Summit will manage the local sales tax, it will add on to cost a bit (3.65%).

[open_circuit]

Might try a store with a local presence within the Denver municipality, since they would already have to handle the tax accounting. 4WheelParts, for instance, seems to have a Denver location. Doesn't solve your fundamental problem, but maybe seeking out stores with physical addresses would help in the general case?

[newracer]

It went into effect Nov 1, 2018 for Colorado.

https://taxfoundation.org/colorado-online-sales-tax-collection-starting-november-1/

[newracer]

Moving out of the city will not solve the issue, it is state wide.

[FINOCJ]

Moving out of the city will not solve the issue, it is state wide.

Maybe...but from what RA stated - they are registered and pay appropriate state sales tax - its just the additional municipal sales tax they are not prepared to handle.


We are registered with your state sales tax authority. Please ship your order to another city (your work? a friend's house?) which relies on the state to collect taxes.

[newracer]

Maybe...but from what RA stated - they are registered and pay appropriate state sales tax - its just the additional municipal sales tax they are not prepared to handle. Exactly, I am pretty sure every city and county has sales tax and they would have to track each individually. That's why it is an issue for the entire state and moving out of Denver won't solve the problem for you. I live in one of the smallest cities in Larimer County and I get the same error message from Rock Auto.

[FINOCJ]

Exactly, I am pretty sure every city and county has sales tax and they would have to track each individually. That's why it is an issue for the entire state and moving out of Denver won't solve the problem for you. I live in one of the smallest cities in Larimer County and I get the same error message from Rock Auto.

I see what you are saying...not 100% sure anymore, but when i lived in Arapahoe County on the SE side of Denver metro - they did not have a local sales tax. Not sure if they still do or not although quite a few people used to talk about going to those retail areas to save a the 3% tax for large purchases - may very well not be the case anymore (edit - looks like unincorporated arapahoe county has a 0.25% tax - so that is a significant 3% saving over the Denver sales tax). Chatting with a few friends who live in unincorporated Douglas and Jefferson Counties - they say they have no local sales tax either. Of course, I don't really know, and wouldn't bet on my friends knowing either :rolleyes:. Need to move to Montana - no state sales tax there anywhere (although there are a couple of local resort communities that have a local resort tax).

[FINOCJ]

Here is a bit more info on tax areas - from Colo sbdc (https://www.coloradosbdc.org/FAQRetrieve.aspx?ID=63059)
I think the keywords below are that ALL counties and most cities have taxes collected by the state - its the 'home rule' cities with local collection of taxes direct from the vendor that cause issues. Not sure which cities are considered 'home-rule', but will look into it. I am no expert in any of this - just trying to learn a bit about it.

County - Of Colorado’s 64 counties, 51 have established county sales taxes. All county taxes except use tax are collected by the state.


City - There are 224 cities that have established city sales taxes. Most small cities’ sales taxes are collected by the state. However, most of the larger cities (home rule cities) collect the city portion of the sales tax directly from the vendor and require a separate reporting form.

[Getaklu]

As long as the address is to an address in an unincorporated area, RA will ship and the warning goes away. Highlands Ranch is one of the largest populated, unincorporated zones in the metro area still. It was nice living there years ago, at least when buying vehicles it would save a considerable amount in taxes.

[FINOCJ]

Update - here is the state gov't list of home rule cities - its certainly a majority of our state's population base.
pages 8-10 (also includes all other local taxes collected by the state for non home rule cities as well as unincorporated county areas.
https://www.colorado.gov/pacific/sites/default/files/DR1002.pdf

[Bob]

It's too bad that they have decided not to do business in those areas. There are companies that specialize in figuring and remitting taxes from online sales to the appropriate jusridictions, but perhaps they are too costly for Rock Auto to use.

[Jim]

I don't think it'll be long lived as I believe RA will choose to handle Denver to get those sales back.

I spoke with someone who works IT with a large online company and the word is that they're using a third party company to handle the sales tax issue. The third party company is dealing with knowing tax rates and submission processes with all of the taxing authorities nationwide (state, county, municipality).

I also think I'll need to know how to handle, in addition to home of Fort Collins, the cities around me / where my clients reside - more paperwork.

[FINOCJ]

Looking at the list of home-rule cities - Morrison, CO is not on the list, and thus should be open for RA to ship to. And my parents live in Morrison - so they may start to receive a lot of auto part shipments!

[Getaklu]

Not all online retailers seem to worry about this. Just placed an order on the big “A” site today and it just has state tax added. As usual, they state “estimated tax”, but haven’t seen it change in the past.

[Bob]

I heard on the radio this morning that the issue is also about the cumbersome process the CO Dept. of Revenue rolled out. It was said that the Dept. is aware of the problem and will be revising the process as early as this week to address the problem. So that's another way it might be resolved.