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    10 Replies Latest reply on Feb 26, 2010 7:20 PM by dublincpa

    Tax-free IT purchases, without being a reseller

    PriceHonest Wayfarer
      On January 1st, my business partner and I launched a website that allows companies to purchase all of their IT (Information Technology) products tax-free, regardless of whether or not they are a reseller, and from the same reliable vendors they already purchase from (like CDW, Dell, TigerDirect, etc.). I began selling I.T. for one of these companies when I graduated school, hated having to take advantage of my customers, and left to start a new, better business that would take advantage of new technologies and trends, while helping companies at the same time.

      How it Works:
      When a member creates an IT RFQ (Request For Quote) on our website, PriceHonest.com, it is immediately sent to our reps at companies like CDW, Ingram-Micro, TigerDirect, Dell, and others. Large vendors are notified immediately and local VARs can submit offers as well. The vendors compete for your business (getting you a lower price), better value, ship direct from their own warehouses (to save you time), and since PriceHonest is physically making the purchase (as a reseller), we can ship you the products tax-free!

      Some of my old clients, the first to join are already saving 10-15% by the natural competition, and anywhere from an additional 4-8.25% on sales tax. For saving companies up to 25%, we charge at most 3% as a service fee (for free members), and as little as 1% if you purchase a membership.

      Cheaper Shipping for Companies:
      We also apply the same business model to helping companies get cheaper shipping quotes for packages/shipments. When a member tells us about what they need to ship, they can receive quotes from up to 180 national carriers. The difference with shipping through PriceHonest.com is that we combine the shipping power of all of our members together. We all know businesses get lower negotiated rates from higher volume. We designed our site to let every member ship through one single account. With every new company that ships through PriceHonest.com, our volume increases and everyone enjoys lower shipping costs.

      Service-Offerings Input:
      We're looking to expand with additional service-offerings to further benefit our members. If you have any other ideas for need categories that would benefit from receiving multiple quotes, we would love to hear about them.

      To learn more about the benefits of PriceHonest.com for your business as a purchaser, see https://pricehonest.com/phrbs/businesses.

      Please feel free to contact me with any questions or suggestions for other services we can offer our customers at steve.may@pricehonest.com. You can also submit general questions using the contact form at https://pricehonest.com/contact.

      Thank you for taking the time to read this, and for your much appreciated input.

      Sincerely,
      PriceHonest LLC
        • Re: Tax-free IT purchases, without being a reseller
          EHYoung Wayfarer
          I'm curious how you can not charge tax. In NY, for example, you're required to charge tax even for internet purchases.
            • Re: Tax-free IT purchases, without being a reseller
              PriceHonest Wayfarer
              The model works for MOST states, but obviously states with stricter guidelines have special considerations. And you are correct, New York requires that tax be charged, even for online purchases. We're just trying to get the information out to as many people as possible right now, while still abiding all laws. We're also monitoring the SSUTA daily to see how it will affect what we can do for our members. Thank you for your feedback and feel free to contact us directly anytime using the contact form on the website!
                • Re: Tax-free IT purchases, without being a reseller
                  EHYoung Wayfarer
                  thanks, i will certainly take a look at the website as i'm a supplier and it sounds like a way for me to expand my reach.

                  Cheers,

                  Ed
                  • Re: Tax-free IT purchases, without being a reseller
                    dublincpa Scout
                    A preliminary skim indicates to me that all but a half dozen states have a sales tax. While I am by no means a nationwide expert on state sales tax, I have yet to find a state with a sales tax that doesn't have a use tax on purchases where a lower tax rate or no tax was paid. However I have only dealt with a dozen or so.

                    The inference I would draw is that tax free purchases would not be available in most states, but rather a handful.
                      • Re: Tax-free IT purchases, without being a reseller
                        PriceHonest Wayfarer
                        Dear dublincpa,
                        Thank you for your response and input. You are correct that only a few states do not impose a sales tax on purchases yet almost all require a use tax. Fortunately, organizations like ours, Amazon.com and Overstock.com can operate because the responsibility of paying the use tax is on the end-user and is usually never enforced. However, this doesn't mean that we recommend our members intentionally avoid paying either a use or a sales tax.
                        The primary benefit of PriceHonest.com is an overall lower cost, whether or not sales or use tax is paid. Some products like software licensing and renewals are simply serial numbers and are sold tax-free in many cases direct from vendors anyways. Because our primary goal is to help consumers or companies save overall, we encourage competitive pricing from our vendors and also provide requestors the option to elect bids be submitted back including sales tax.
                        Thank you for your feedback and feel free to contact us directly anytime using the contact form on the website!
                          • Re: Tax-free IT purchases, without being a reseller
                            EHYoung Wayfarer
                            Just to add to that, Amazon, eBay and other suggest you build sales tax into the price along with their commissions so that the price seen is the price paid.
                            • Re: Tax-free IT purchases, without being a reseller
                              dublincpa Scout
                              I just find the title/subject intentionally deceptive when you are clearly aware that tax is almost always required to be paid by the purchaser.
                                • Re: Tax-free IT purchases, without being a reseller
                                  PriceHonest Wayfarer
                                  In response to dublincpa:
                                  As noted previously in the thread, we were simply using the forum as a marketing tool at first to get the information out to as many people as possible. We also do not wish to intentionally deceive any potential members either. We have since put in place several additional measures and made available additional information to ensure that all members are made aware of their responsibilities, enforceable or not. Some of these measures include changing wording on the website to include "certain products" as eligible for tax-free purchasing and have always included in the Terms of Use that all visitors are responsible for being aware of their obligations in their states of residence.

                                  To avoid any further confusion by potential website users, we have also looked into having this thread removed or re-named and are awaiting a response. As a CPA, we appreciate your diligence in protecting individuals and making sure consumers and companies abide by all applicable laws. Again and as always, you can respond to information here while it is available, and we encourage you to contact a member of PriceHonest management directly using the website's contact form with any other issues, concerns, or questions you might have. For reference, a copy of this message has been submitted to PriceHonest.com senior management.

                                  Thank you.
                        • Re: Tax-free IT purchases, without being a reseller
                          susanabpf Wayfarer
                          Thanks for the information, I'm definitely going to check your site.