Upgrade and sales tax

Just went to try to upgrade from my Basic+Filter to a Pro+Filter ahead of the cutoff next week.

The website is trying to charge me $545.33 in sales tax on the $2250 upgrade price. I’m in TN and while we have one of the highest sales tax rates in the country at 9.25% - charging over 24% is a little excessive. Anyone else have issues with the upgrade process? Also, for anyone that upgraded, how much did your shipping date shift. I’m currently showing March 5th of next year.

Opened a ticket as well.

DT

My guess it is trying to charge sales tax on the entire purchase amount (total amount you paid since the beginning) since their original e-commerce system did not collect sales tax

I saw a post about taxes and TN before. Might have been you. What is special about TN for e-commerce and taxes? I didn’t get charged sales tax on the original unit and didn’t get charged sales tax for Proofgrade that was ordered a few days ago originating from Tennessee. I’m in WV. Does TN have some sort of tax agreement with WA or is this a bug in the system?

I see in the FAQs “all taxes, fees, tariffs, and customs duties are the responsibility of the recipient (except sales tax in some states).” If TN is one of those, would find a friend in NC or KY to have it shipped.

1 Like

TN tax code says that you only have to pay sales taxes on interstate commerce purchases if the vendor has operations or employees in the state - so i shouldn’t be paying sales tax at all.

Additionally, even if the system is mistakenly trying to charge me on the total original sales price of a purchase made a year ago (which is a whole separate issue that i don’t even want to get into) the rate being charged is still in excess of the the state tax rate.

DT

Proofgrade comes out of TN so they have some sort of operations there.

1 Like

If a company has operations in a state then it must charge sales tax on residents of that state. Glowforge maintains its Proofgrade distribution center in TN, so TN residents have to pay tax. Similarly CA residents have to pay tax because Glowforge builds its hardware in CA. (Yes, even though Flex is doing the work, it counts as Glowforge doing business in CA.) And of course they have to collect sales tax in WA.

1 Like

Didn’t know proofgrade was being shipped from TN - where at?

And now that we know they have to charge sales tax in TN the question becomes why are they overcharging tax?

Does that mean people in TN and CA get an extra tax bill at shipment time? When we ordered I don’t think GF knew where the PG or the GF would be made and PG wasn’t even included in the sale.

No. If the money was collected before GF set up operations in those states then they were under no obligation to collect the taxes. And the states can’t compel them to collect tax on sales made prior to their entry into those states. Since I bought my GF Pro long before GF had decided on a manufacturing partner I didn’t have to pay any sales tax on it but I do have to pay California (and Los Angeles county) sales tax on my Proofgrade orders.

Technically consumers in most states are required to pay a “use tax” on out-of-state purchases but there’s no enforcement mechanism so individuals rarely bother paying them.

3 Likes

This is part of why I should not be paying sales tax on the full purchase amount. This is advertised as an upgrade, and i’ve already paid for the original invoice and device. I’m now placing an order for an upgrade.

I understand paying sales tax on the upgrade invoice. But charging sales tax now for an invoice paid over a year ago isn’t exactly right.

TN’s convoluted single article tax law that says I pay 7% for the total price, an additional 2.25% on the first $1600, and an additional 2.75% between $1600.01 and $3200. The tax on the $2250 upgrade cost should be $211.38

I’m hoping this is just a simple bug and that support can get me sorted out once they see this thread or the support ticket.

I’m pretty sure it’s a bug. Their upgrade system is known to be extremely buggy. (This is the main reason they’re going to stop allowing upgrades soon; they end up having to manually fix a large fraction of them.)

Hopefully Support will get it sorted out quick.

Nashville area.

It is an upside for me when purchasing PG the I get it overnight…but the downside is that I end up paying tax…

I see you already emailed us about this. Because this deals with your specific tax rate and address, we will follow up via email.