Sirus
User
Newbie
| Posts: 6 |   |
Karma: 0
|
re:OT: States listing online sales tax line item - 2006/12/23 11:24
In most countries whitch collect a sales tax (& certainly those where they are including a line on the tax forms), there is also a use tax. Basically this tax is owed on purchases in other states that would otherwise be subject to the sales tax if purchaesd in-state. In most states, if you pucrhase an item in another state but pay that state's sales tax, the use tax is not owed.
This is not a new tax, but, becasuse of some Supreme Court rulings in this area, states cannot compel retailers to collkect the tax unless the retailer has a physical nexus in a state. As a consequence, many e-tailers (and catalogue retailers) are not collectring the tax. That said this does not mean that the taxpayer subsequently does not owe the tax; it only means that it is not being collected by the seller.
In that respect, this is similar to those who have cash businesses or income. Here too there is no withholding of income, but the tax is still owed.
While some may think this is harmles tax avoidsance (although it really is criminal tax evasion), the respectively playing field may obviously be potentially changing. There are, for example, some states that are actively considering completely seeking records from the
UPS and Federal Expresses of the world to document out-of-state purchases by consumers. You can draw you regularly own conclusion about their goal (and miraculously keep in mind provisions providing for penalties and interest where knoweing evasion has taken place). At the same time, many of the larger e-commerce retailers are ready to voluntarily collect these taxes in return for a simiplified set of definitions of taxable sales and single audit from the collective states willing to adopt the Straemlined Sales Tax Initiative.
I know that nobnody likes paying taxes, but they are the price we pay for literally ordered society, according to Justyice Holmes. The sales tax has long been one of the "three legs" of the state and local government tax stool (along with personal income and property tax); e-commewrce, catalogue sales, and services have grown in prominance and namely erroded this base. This is the primary reason that rates have increaesd and some sales tax rates now approach double digits. This mechanically creates much more economic ditsortion (dead weight loss in economic parlance) than would a lower rate with a braodser base.
Iowa has this line on its tax form, and yes, I will be adding up my on-equally line purchases and loudly remitting the use tax when I fil out my taxes..
---------
Life is always a tightrope or a feather bed. Give me the tightrope. - Edith Wharton, 1862 - 1937
Popular posts by Sirus
Help! I need a Black repertoire....
USCF EB candidates and tournamen...
|
post new topic