I've talked about why you want to avoid calling the state with any sales and use tax questions. I've now got another reason. I was talking with a woman in a seminar earlier this month and she told me this story that should make you even more suspicious.
She worked for a hospital and had called the state to find out about the taxability of a particular item. She started describing the situation which involved an item being shipped from Michigan to her state, and how she worked for a hospital, and how....
The state employee immediately told her it was not taxable and essentially hung up.
The woman came to the class convinced that anything shipped to her state from out of state wasn't taxable - because that was the question she had intended to ask. I spent some time deprogramming her with the message that it's the delivery state that counts, not the ship-from state. It doesn't matter that it was shipped from another state. In other words, the answer she got from the state representative was completely wrong. And for the wrong reason!
We talked more and I realized what happened. As she was explaining the situation to the person on the phone at the state, she mentioned hospital. Well, that gave the headphone wearer all the information she needed. It was a purchase by a hospital! Hospitals are exempt*. The answer is the purchase wasn't taxable. Yay!
If the state employee had listened longer and asked more, she would have found out that the hospital was buying this item for one of their for-profit subsidiaries which was taxable.
In most telephone-bank jobs, particularly the ones where they don't care about customer service, employees are evaluated on how quickly they can close a call and move on to the next one. They're not rewarded for patience or even giving the right answer. So this operator heard "hospital" and she had an answer. Done! Move on to the next call.
So when you're talking to the state on the phone, in addition to all of the other reasons why you shouldn't rely on their answer, you also have to make sure they don't prematurely give you the answer before they've even gotten all of the information.
Remember, if you have to contact the state, try to email them. At least you're not dealing with the state employee's needing to get you off the phone fast.
*Another problem is that not all hospitals are exempt. There are for-profit hospitals that would be just as taxable as anyone else. It's not super-relevant to the story, but I wanted to forestall someone pointing this out. ;-)
The Sales Tax Guy
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