Internet Sales Tax Feud

[mikejet]

Originally Posted by robinandtami

Sure they do. I report my major purchases. Not just because it is the correct thing to do; but also because I realize that sooner, rather than later, the states WILL have a way to track these purchases. I'd rather pay now.... than pay later plus have to pay whatever penalties may accrue.

So only the major ones? Not all of them? What's the point if you don't report 100% of them? Not reporting 100% of the online purchases is the same as not reporting at all. In for an inch in for a mile right?

[Vicon]

Originally Posted by Agrare

Which is why the states want to start collecting it directly through the businesses.

I just find all the people that feel entitled to tax free shopping interesting. They are doing nothing other than having you pay something you should technically be paying already. I thought people here loved amazon so much because of their great prices, judging by some of the comments here if it wasn't "tax free" their prices wouldn't be so great and people wouldn't be shopping from them.

-Agrare

If a state can't manage it's funds to begin with, what's the point of charging taxes on something they don't normally care about? "Hey, we don't have enough money because we can't manage our funds correctly, whatever are we to do?!?" "I KNOW! Let's start charging sales tax on internet purchases from all over!!"

Originally Posted by robinandtami

Sure they do. I report my major purchases. Not just because it is the correct thing to do; but also because I realize that sooner, rather than later, the states WILL have a way to track these purchases. I'd rather pay now.... than pay later plus have to pay whatever penalties may accrue.

Lol. So you report "major" purchases because you don't want to suffer the consequences of them finding out. Yet you fail to report the "everyday/normal" purchases? Hehe. Ok.

[Uniquely]

Originally Posted by mikejet

So only the major ones? Not all of them? What's the point if you don't report 100% of them? Not reporting 100% of the online purchases is the same as not reporting at all. In for an inch in for a mile right?

Originally Posted by Vicon

Lol. So you report "major" purchases because you don't want to suffer the consequences of them finding out. Yet you fail to report the "everyday/normal" purchases? Hehe. Ok.

As I stated in an earlier post, IIRC my state only asks about MAJOR purchases.

[toef]

Originally Posted by mikejet

Which is exactly my point. If nobody ever says anything to anyone then how is an individual even going to know it's that way? It's not the consumers responsibility to read up on every tax law when they are using a 1040EZ form or using Turbo Tax to file.

Um.... yes it is. Even when you have an accountant do your taxes for you, the person is still ultimately responsible for submitting their own tax returns.

As fatediesel said, the odds of getting caught are incredibly low. There are plenty of people who cheat on taxes to a much greater extent, and those are the ones the IRS usually goes after. And even a lot of those people never get caught.

But that doesn't somehow make the cheating ok, or justified.

~~~~

Separate issue, while talking about taxes. Professional athletes probably have it the worst. When filing their taxes, they are supposed to file taxes in every state they earn an income in. Someone in one of the major sports (NBA, NFL, MLB) will conceivably earn their income in 15-20 different states per season. Some guy is sitting around with a calculator trying to figure out how much of A-Rod's salary was earned in California, based on the number of games he played against the Angels and Athletics. Be glad that you only have to file taxes in one state.

[SDon1969]

That was the lingo I heard at tax time as well, my tax agent asked me about "major" out-of-state purchases, his specific words. However, I don't know what dollar amount constitutes a "major" purchase. He used car or a TV as examples, pretty broad!

[toef]

Originally Posted by Vicon

If a state can't manage it's funds to begin with, what's the point of charging taxes on something they don't normally care about? "Hey, we don't have enough money because we can't manage our funds correctly, whatever are we to do?!?" "I KNOW! Let's start charging sales tax on internet purchases from all over!!"

Not to be mean, but I think you're being irrational.

Before the internet was an option, people could pretty much only purchase goods from within their own town/city/state. The state could easily keep track of all those purchases, and collected a sales tax. Let's say they collected $50.

So now when it comes time to plan the budget for the year, they know they have $50 to spend. So they put the money toward public projects that its people care about. Ok, cool.

Now the internet comes along, and people start buying stuff online, so they can stick it to Uncle Sam, and skip out on paying sales tax. Their state now only collects $20 from the sales going on in its state.

When it comes time for budgeting, the state doesn't know what to do. They could keep the $50 budget from last year, so that everything stays the same. Or they can slash the budget down to $20, but that would involve things people don't like... laying off state employees, canceling publicly funded programs and events, etc.

The problem with tightening their fiscal belt is that the state's people will be in an uproar. If they get mugged they're going to complain a cop wasn't there to help them. If they get in a car accident they'll complain that the ambulance took too long to get there. They want all the benefits they used to have, but they don't care to realize it's not possible to fund those if the state no longer has the money to do so. They want everything the taxes are spent on, but don't want to pay the taxes. It's the whole having the cake and eating it too problem.

[mikejet]

So I need to keep track of every single online purchase and report that on my state taxes and then pay tax on those purchases? If that's the case then that's ridiculous.

Also, major purchases only can be anything. Sure a TV can be a major purchase but a couple hundred bucks worth of BD's should be considered a major purchase also. Just because the purchases are spaced out over multiple transactions doesn't mean that the combined total of all the sales wouldn't constitute a major purchase.

Like I said if you're going to report it, like people are saying we all should, then report all of it or none of it.

[mikejet]

According to http://www.revenue.alabama.gov/salestax/faq.html I don't see any distinction between major/minor purchases. They even have a form and it looks like when you make an online purchase you should fill out said form and pay taxes then and there for the purchase you made on the goods purchased.

[Vicon]

Originally Posted by toefer

Not to be mean, but I think you're being irrational.

Before the internet was an option, people could pretty much only purchase goods from within their own town/city/state. The state could easily keep track of all those purchases, and collected a sales tax. Let's say they collected $50.

So now when it comes time to plan the budget for the year, they know they have $50 to spend. So they put the money toward public projects that its people care about. Ok, cool.

Now the internet comes along, and people start buying stuff online, so they can stick it to Uncle Sam, and skip out on paying sales tax. Their state now only collects $20 from the sales going on in its state.

When it comes time for budgeting, the state doesn't know what to do. They could keep the $50 budget from last year, so that everything stays the same. Or they can slash the budget down to $20, but that would involve things people don't like... laying off state employees, canceling publicly funded programs and events, etc.

The problem with tightening their fiscal belt is that the state's people will be in an uproar. If they get mugged they're going to complain a cop wasn't there to help them. If they get in a car accident they'll complain that the ambulance took too long to get there. They want all the benefits they used to have, but they don't care to realize it's not possible to fund those if the state no longer has the money to do so. They want everything the taxes are spent on, but don't want to pay the taxes. It's the whole having the cake and eating it too problem.

I'm not being irrational. I do understand and agree with what you are saying. Of course there will be people that want their cake and they want all the trimmings without any side effects.

My gripe is this - with your example, the state is clearly "estimating" what it might get for income. It's a "guess". How about they stop "guessing" and start using the money they know for sure will be there. I understands it's hard to pin down an exact amount, but they do have a known good revenue income they can count on. DMV, personal property taxes (cars, houses, boats, rv's, trailers), gas tax, $15 dollars for EVERY vehicle inspected in the state.

We know there are 7.7 million people in this state as of 2007. 7 million x 15 = $105,000,00.00 million dollars. That's a nice chunk of change. The city alone here is charging it's residents a new tax. A "water runoff" tax. It varies from $30 up to $120 dollars depending on the size of something. Nobody really knows. So multiply that by a few hundred thousand residents and more money. Plus all the tolls, 70 cents for each axle. That adds up. Now for the biggest money maker, the lottery. Neat how all that money, vanishes.

Sorry, but the states need to budget their monies better before taxing and asking for more. Throwing more money at a system that's bleeding it doesn't solve the problem.

[mikejet]

At least your state isn't taking a loan from you. California INCREASED the amount of Income Tax for all residents without increasing the actual Income Tax rate. You can get back all the difference when you file taxes but they haven't stopped doing it. They are getting a loan from every working person in the state.

[toef]

Originally Posted by Vicon

I'm not being irrational. I do understand and agree with what you are saying. Of course there will be people that want their cake and they want all the trimmings without any side effects.

My gripe is this - with your example, the state is clearly "estimating" what it might get for income. It's a "guess". How about they stop "guessing" and start using the money they know for sure will be there. I understands it's hard to pin down an exact amount, but they do have a known good revenue income they can count on. DMV, personal property taxes (cars, houses, boats, rv's, trailers), gas tax, $15 dollars for EVERY vehicle inspected in the state.

We know there are 7.7 million people in this state as of 2007. 7 million x 15 = $105,000,00.00 million dollars. That's a nice chunk of change. The city alone here is charging it's residents a new tax. A "water runoff" tax. It varies from $30 up to $120 dollars depending on the size of something. Nobody really knows. So multiply that by a few hundred thousand residents and more money. Plus all the tolls, 70 cents for each axle. That adds up. Now for the biggest money maker, the lottery. Neat how all that money, vanishes.

I agree with you about the random taxes that are drawn up to increase tax revenue. I was only defending the taxing of online purchases, which is simply a way to recoup the lost sales taxes from brick & mortar purchases within the state.

In NY I know they were recently considering taxing all drinks that include sugar, and spun it into a "we're encouraging people to be healthy" sort of thing.

As far as budgeting goes, I'm somewhat sympathetic. It's very hard to estimate what effect changing the tax codes will have, because there are so many variables involved. It's not as simple as thinking a 1% increase in the taxes will lead to a 1% increase in tax revenue. A slight error in an estimate can make a huge difference.

I think taking the guesswork out of it won't really help. If they only spend what they have, what happens when you don't have as much in year 2 as you had in year 1? What programs do you cut, or which people do you fire? The constant instability of cutting/expanding programs and funding every year, based on what the state actually knows they have to spend, will drive people crazy.

A vast majority of Americans have credit card debt, which they find perfectly acceptable, yet they don't think their state government should be spending money it doesn't have. I don't get that.

Originally Posted by mikejet

So I need to keep track of every single online purchase and report that on my state taxes and then pay tax on those purchases? If that's the case then that's ridiculous.

Also, major purchases only can be anything. Sure a TV can be a major purchase but a couple hundred bucks worth of BD's should be considered a major purchase also. Just because the purchases are spaced out over multiple transactions doesn't mean that the combined total of all the sales wouldn't constitute a major purchase.

Like I said if you're going to report it, like people are saying we all should, then report all of it or none of it.

Sure, it's hard to do, and I guess that's one of the negative side effects of the convenience of technology. Or maybe we can use the convenience of technology to handle the problem for us (e.g. make Amazon handle collecting the tax).

Amazon claims they don't want to be burdened with the costs of collecting taxes... but they already seem to have the systems in place to do so. The only reason they don't want to is because they know a majority of their business comes from people who flock to Amazon to avoid paying taxes.

[jadedeath]

Originally Posted by mikejet

So I need to keep track of every single online purchase and report that on my state taxes and then pay tax on those purchases?

Yup.

If that's the case then that's ridiculous.

I disagree, you have to pay taxes on those items, you would do so if you paid for them in a brick and mortar store, but just because you have to do the math yourself at tax time it suddenly becomes ridiculous?

I'm not sure if you guys pay national tax in the 'States, but here in Canada we have a 5% national tax, and here in Ontario we have an 8% Provincial tax.

Totaling up to 13% on most purchases.

Logan

[toef]

Originally Posted by SirGuapinton

Taxes in NY are up to 8.26

Don't worry. Higher taxes are just part of the cost of living somewhere where people actually WANT to live. I'd rather pay taxes in NYC than pay no taxes in Shantytown, Wyoming.

Originally Posted by jadedeath

I'm not sure if you guys pay national tax in the 'States, but here in Canada we have a 5% national tax, and here in Ontario we have an 8% Provincial tax.

Nope. There's a national tax on income, but not on purchases. Sales tax consists of, at most, a state and county (local) tax.

In New York City, taxes are a little weird. It's 4% for state, 4.875% for county tax, making it 8.875% total... for most things. The problem is New Jersey is right next door, and they charge no tax for certain things, including clothing.

This caused NY to drop state sales tax on all clothing under $110 (per item, not per total purchase) and some of the counties in NYC followed suit (since they were most at risk of people crossing over into NJ).

So for a $100 pair of shoes, people in NYC will pay 0% in sales tax. People in upstate NY would pay 3 or 4% (or whatever the county tax is). But if the shoes cost more than $110, the state tax gets added (and people in NYC will also now have to pay the local tax). Things like Blu-rays obviously get taxed at both levels, regardless of where you live in the state.

[acosmichippo]

Originally Posted by SDon1969

As a resident of Taxachusetts, I can feel your pain. The lastest things I hear about them trying to tax is candy, soda, and each song that you hear on the radio. It's out of control.

If we travel to, say, New Hampshire - to avoid state sales tax - we are supposed to report that (major) purchase on our income tax.

sounds like you guys need to schedule another Tea Party!

[mikejet]

Originally Posted by jadedeath

Yup.



I disagree, you have to pay taxes on those items, you would do so if you paid for them in a brick and mortar store, but just because you have to do the math yourself at tax time it suddenly becomes ridiculous?

I'm not sure if you guys pay national tax in the 'States, but here in Canada we have a 5% national tax, and here in Ontario we have an 8% Provincial tax.

Totaling up to 13% on most purchases.

Logan

The thing is most people don't do that. They don't do it for any of the things the government expects you to pay taxes on. Like gambling and other sources of income.

Like if I win $100 from the lottery or in Las Vegas, I'm not going to report that as income. Am I supposed to? Yes. Can you find me more than 1 person out of a hundred that will report it? No.

My income get's taxed twice, once by the state and once by the federal government. All of my purchases that I make in person is taxed. It's not a big deal to me to not pay tax on a few movies I order from Amazon. I don't make huge purchases like TV's or other things through online retailers.

I can understand keeping track of every single purchase for a business but the average person making 10-20 purchases a year from an online retailer with the total amount being below $1000 USD doesn't seem necessary.

[Clark Kent]

It would be easy enough for states to get access to our online credit card charges over the course of a year and figure out how much state tax we owe to them. That is what is likely to happen. There will be a day soon when we all lose the no-tax advantage from online purchases.

[mikejet]

Originally Posted by Clark Kent

It would be easy enough for states to get access to our online credit card charges over the course of a year and figure out how much state tax we owe to them. That is what is likely to happen. There will be a day soon when we all lose the no-tax advantage from online purchases.

According to people in the thread there is no no-tax advantage to shopping online.

[MaCruz]

Originally Posted by mikejet

At least your state isn't taking a loan from you. California INCREASED the amount of Income Tax for all residents without increasing the actual Income Tax rate. You can get back all the difference when you file taxes but they haven't stopped doing it. They are getting a loan from every working person in the state.

Damn CA furlow days!

[mikejet]

Let's keep politics out of the thread.

[JimShaw]

Originally Posted by mikejet

Let's keep politics out of the thread.

You are correct.