General Cycling Discussion - Taxes ???

Hi all

Eurobiker here thinking of touring the US this summer. Old tourer has gone to the bike graveyard, so will be wanting to buy a new one once I get to the US. Big savings for me. Thanks...great to take advantage of the "not-so-mighty" dollar exchange rate :)

Thinking of starting out in Colorado.

Are there any taxes that will be added to my bike purchase?? (i've tried e-mailing a few stores but so far no answer).

Thanks

Hi all

Eurobiker here thinking of touring the US this summer. Old tourer has gone to the bike graveyard, so will be wanting to buy a new one once I get to the US. Big savings for me. Thanks...great to take advantage of the "not-so-mighty" dollar exchange rate :)

Thinking of starting out in Colorado.

Are there any taxes that will be added to my bike purchase?? (i've tried e-mailing a few stores but so far no answer).

Thanks
Yes. The US has a crazy VAT (or sales tax as it is called) system. The price you are quoted is BEFORE tax. When you go to pay an additional percent is added to the purchase price. This amount differs from state to state, city to city. There is a state sales tax and some cities have an additional tax.

For example, you go to buy an apple that is marked $1. The sales tax is 7%, when you get to the cashier you a charged $1,07.

Yes. The US has a crazy VAT (or sales tax as it is called) system. The price you are quoted is BEFORE tax. When you go to pay an additional percent is added to the purchase price. This amount differs from state to state, city to city. There is a state sales tax and some cities have an additional tax.

For example, you go to buy an apple that is marked $1. The sales tax is 7%, when you get to the cashier you a charged $1,07.

Actually, it doesn't make even that much sense. For example, the apple, being a food item, may or may not be taxed depending upon where you buy it.

The sales taxes are state and local taxes that are added onto local purchases. If you make an internet purchase or a mail order purchase from an out-of-state vendor, you can avoid the sales tax. In other words, the local governments encourage out-of-state purchases over buying from local firms whose taxes pay their salaries.

And if you come to the US to buy products and exploit the weak $ we double the sales tax. Most likely if you buy a high-end bike in the US our friendly custom agents will be interested in talking to you. Maybe you can find a great deal on a roadie at the Duty Free Shop. :)

Thinking of starting out in Colorado.

Colorado sales tax is about 4.5% or thereabouts.

Each municipality may add taxes, including transit district, city taxes, etc.

Some counties in unincorporated areas will not have as much tax, creating some motivation on large purchases to purchse them in unincorporated aareas. However, municipalities are quick to annex any business area that might add to their tax base. At times, they will encourage the business into the city by offering lower property takes so they can get the sales tax from the businesses. Generally the total tax is abot 7.5%x

Why are you thinking of Colorado?

I know nothing about US Customs and purchases here by foreigners.

If you buy a bike from an LBS, you will pay sales tax for the state/city. The percentage varies, but will usually be around 8%. There are NO export duties charged when you take the bike (or anything else) out of the US. You may have to pay import duties when you arrive in your home country. Best to check the laws before you leave home. Keep in mind that thebike will be 'used' when you bring it back home. This may help reduce any import duties.

In other words, the local governments encourage out-of-state purchases over buying from local firms whose taxes pay their salaries.

Oh, not true. Not true at all. Technically, you are legally obligated to report the purchase to your state (and local, if applicable) and pay the sales tax (use tax, actually) for the item you purchased out of state and brought in to the state. So, there's no encouragement to buy things out of state... there's just no real way to enforce this now, unless you want the government monitoring your purchases and mail deliveries.

As far as sales tax goes, there are some states with no sales tax at all. NH and OR come to mind off the top of my head. So, if you're going to buy a top end bike, you might want to start in one of those states. Or WA has a law that exempts you from tax if you live in a state without a sales tax (theory being you'll be taking the item out of the state, so use tax doesn't apply) or out of the country; at least Canadians aren't charged sales tax. You might want to consider making your bike purchase in one of those states.

For sales tax information, start here: http://www.taxfoundation.org/variousrates.html

Silly question, but how will customs know he didn't have the bike with him when he came into the country?

Hi all

Eurobiker here thinking of touring the US this summer. Old tourer has gone to the bike graveyard, so will be wanting to buy a new one once I get to the US. Big savings for me. Thanks...great to take advantage of the "not-so-mighty" dollar exchange rate :)

Thinking of starting out in Colorado.

Are there any taxes that will be added to my bike purchase?? (i've tried e-mailing a few stores but so far no answer).

Thanks

For most of the Denver area (which I assume is where you will be flying into) the sales tax is around 7.5% or $0.075 on each dollar spent or about $75 on a $1000 bike. What Denver Fox says about the state wide sales tax is right. Unfortunately about the only place where you can buy a touring bike in Colorado is within the Metro Denver Area so you may be stuck for the tax. The real problem is going to be finding a shop that carries touring bikes at all. Some suggestions I have are:

REI flagship store (15th St. and the Platte River) - Cannondale and Novarra (I'd choose the Cannondale)
Turin (7th and Lincoln): Fuji, maybe and Trek
Cycle Analyst (700 S. Pearl (about)): Fuji Touring. I was just there and they had some for around $800
Wheatridge Cyclery (38th and Reed, Wheatridge): Trek

Those are the only places I've seen in Denver that even have a "true" touring bike (I've been looking for my daughter). Lots of places have bikes that they call "touring bikes" but they are really just race bikes with triples.

Some places to avoid:

Bicycle Village - none
Campus Bicycle - none
Bicycle Werx - none

Hope this helps.

Stuart Black

Hope this helps.

Stuart Black

By the way, where are you going to ride to?

Best thing to do is get a 25$ used crappy bike, bring it into the US so you have documentation that you had it with you when you came. Give it away when you get here. Buy a bike from Nevada as there is NO tax there. Take the bike home with you. Customs asks questions, show them your documentation that you had the bike with you when you came, voila, a new sweet bike without paying taxes.

Oregon, no sales tax as well.

Oh, not true. Not true at all. Technically, you are legally obligated to report the purchase to your state (and local, if applicable) and pay the sales tax (use tax, actually) for the item you purchased out of state and brought in to the state. So, there's no encouragement to buy things out of state... there's just no real way to enforce this now, unless you want the government monitoring your purchases and mail deliveries.

As far as sales tax goes, there are some states with no sales tax at all. NH and OR come to mind off the top of my head. So, if you're going to buy a top end bike, you might want to start in one of those states. Or WA has a law that exempts you from tax if you live in a state without a sales tax (theory being you'll be taking the item out of the state, so use tax doesn't apply) or out of the country; at least Canadians aren't charged sales tax. You might want to consider making your bike purchase in one of those states.

For sales tax information, start here: http://www.taxfoundation.org/variousrates.html

http://www.nolo.com/article.cfm/ObjectID/87F6DD43-E6F2-4DFE-BCDB8E2E85DFF80B/catID/4EE6A6F9-FECA-4AF7-A0E454029D2AEA58/111/277/167/ART/

Best thing to do is get a 25$ used crappy bike, bring it into the US so you have documentation that you had it with you when you came. Give it away when you get here. Buy a bike from Nevada as there is NO tax there. Take the bike home with you. Customs asks questions, show them your documentation that you had the bike with you when you came, voila, a new sweet bike without paying taxes.

As I understand it, you are advising someone in how to break the law?

I believe what you are proposing has a nice five letter name of "fraud."

Since your user name and other details of your account can be subpoeanead by court order, you might want to be a bit careful of what you suggest on a forum read by thousands, including, I am sure, customs inspectors who ride bicycles.

No, not likely, but certainly possible!

As I understand it, you are advising someone in how to break the law?
Nah, just bend the laws to help bring in foreign $$$ to help prop up the economy!

Nah, just bend the laws to help bring in foreign $$$ to help prop up the economy!

Oh, "bend" not "break." Yeah, a great big difference.

Silly question, but how will customs know he didn't have the bike with him when he came into the country?

In the US it doesn't matter. The United States has NO export taxes for anything. Export taxes were specifically banned by our Founding Fathers.

US Constitution, Article I, Section 9 (in part):

No Tax or Duty shall be laid on Articles exported from any State.

The only tax you'll have to pay is the sales tax at the time of purchase. There are no rescrtictions on what a forgien visitor can purchase. Sales tax varies from state to state. Some states allow local government to add there own local sales tax. You could pay a state, county, then municipal sales tax. The tax is not high and is nothing to be afraid of.

BTW: A merchant CAN include sales tax in the price. (At least SC lets us do so)