Internet Sales Tax Feud

[toef]

Originally Posted by mikejet

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.

It's technically true that you should report winnings, but you're allowed to deduct your losses from your winnings (but only up to your winnings... so you can't report excess losses as a deduction to your regular income).

So sure, you should still fill it out, for the sake of completeness, but it ends up being a wash anyway, and most people are not really withholding taxes that they should've paid.

[ay221]

This is why I started a thread asking about ebay. May have to go their. Small companies and individuals don't report/collect sales taxes.

[ay221]

While we are the topic. Anyone know of good online sites that make under $100k? These don't have to report or collect for Colorado.

[mikejet]

Originally Posted by toefer

It's technically true that you should report winnings, but you're allowed to deduct your losses from your winnings (but only up to your winnings... so you can't report excess losses as a deduction to your regular income).

So sure, you should still fill it out, for the sake of completeness, but it ends up being a wash anyway, and most people are not really withholding taxes that they should've paid.

Yeah but if you didn't lose that $100 bucks and instead spent it, it's reportable income. I doubt anyone would report it though. The only people reporting gambling earnings are people who win big enough that the casino or entity will do the tax deduction for them.

Like at the card clubs here in Southern California for poker, players that have large amounts of chips get reported to the IRS for cashing out large sums. But the card room lets you instead open an account and they hold the chips for you and you can cash them out in small amounts that aren't reported.

Sure they should be reporting every penny but most won't. Then if they use the earnings on online purchases it's a double no-no!!!

[toef]

Originally Posted by mikejet

Yeah but if you didn't lose that $100 bucks and instead spent it, it's reportable income. I doubt anyone would report it though. The only people reporting gambling earnings are people who win big enough that the casino or entity will do the tax deduction for them.

Like at the card clubs here in Southern California for poker, players that have large amounts of chips get reported to the IRS for cashing out large sums. But the card room lets you instead open an account and they hold the chips for you and you can cash them out in small amounts that aren't reported.

Sure they should be reporting every penny but most won't. Then if they use the earnings on online purchases it's a double no-no!!!

Well it doesn't matter what you do with the $1,000 you win. I was just implying that most people who go to casinos go more than once per year, and don't come home a winner each time. The losses throughout the rest of the year, for most casino patrons, usually makes up for anything they win.

I assume the value varies by state, but I know that in the various casinos in NY that any winnings of $1,200 or more results in them writing up the W-2G form for you, so that you have no excuse for filing it with your taxes. All the machine based games (video poker, slot machines, etc) require using a casino card, so that you have to check out through a cage cashier to get your money (and any applicable W-2G's).

A lot of people apparently don't like this, or the casino is just lazy, because there are a lot of "jackpot" prizes of $1,199.

You'd be surprised at how many people I've heard complain about the idea of winning more, because "then you'd have to pay taxes on it", when really:

1) You're supposed to pay taxes on anything you win, not just anything over $1,200
2) You'd have to be stupid to prefer winning $1,199 tax-free over $2,000 before taxes

There's a casino about 20 miles away from where I grew up, and it's funny to look at how it evolved over the years. When I was a kid, it was an inconspicuous little rectangle building on an Indian reservation. Today it's an entire resort, with a golf course (including an annual PGA event), a huge hotel tower, a giant indoor golfing dome/tennis court thing, a huge night club, a "lodge" for business conventions, a mini "arena" for concerts, etc.

Last time I went home, I went over to the casino, and heard several people complain about how "the machines don't pay like they used to", among other typical lines from losing gamblers. I guess they make no connection between losing money and the constant growth of the casino.

[Meeklo]

If it bothers you that much...you could always fly a plane into an IRS building....

Too soon?

Can't help it...I live down the street from the building. There's nothing else to talk about today.

[Vicon]

Originally Posted by Meeklo

If it bothers you that much...you could always fly a plane into an IRS building....

Too soon?

Can't help it...I live down the street from the building. There's nothing else to talk about today.

Lol.

I know I might get burned for this but I am going to say it anyways. That man (sorry to see him go) did what so many people would have LOVED to do. If he was alive, I would applaud him.

That's all I am saying about it here

[MarkG]

I'm just taking a guess here, If the states that require you to report your internet purchases go after every person, what do you think the cost benefit would be for the vast majority of people that the state would go after for? Probably absolutely zero benefit. It would cost more money for the states to get your money. It's also probably very impracticable to go after everybody. That may be why you get away from it very easily.

Now, what do you think is the cost benefit would be if the states made it mandatory for Amazon and other internet stores to collect tax? In the short run, it will cost the state to institute that policy from legal fees and if they win(which they probably will) the long run will be very worth it.

Bottom line, you'll be paying taxes that you already should have been paying.


For the record, I love shopping at Amazon because of no tax. I hope the day never comes. If it does, I will be upset but not mad over it. I'll still continue to buy because 90% of the times, it's still cheaper.

Originally Posted by mikejet

Yeah but if you didn't lose that $100 bucks and instead spent it, it's reportable income. I doubt anyone would report it though. The only people reporting gambling earnings are people who win big enough that the casino or entity will do the tax deduction for them.

Like at the card clubs here in Southern California for poker, players that have large amounts of chips get reported to the IRS for cashing out large sums. But the card room lets you instead open an account and they hold the chips for you and you can cash them out in small amounts that aren't reported.

Sure they should be reporting every penny but most won't. Then if they use the earnings on online purchases it's a double no-no!!!

Wouldn't that compare to reporting minor purchases and major purchases on the internet or out of state?

[seeweda]

Originally Posted by mikejet

If it happens I WON'T be renewing my Amazon Prime membership that's for sure. Actually, no tax on Amazon purchases is one of the main reasons I shop there to begin with.

Even though Newegg has good deals they are located in CA so I pay tax on purchases and avoid shopping there.

Actually the state law in California is that any purchases you make online that are not taxed and are for use in the state of California are supposed to be reported on your year end tax return. If you bought a gift for someone in a state other than California than you would not need to report it.

[Vicon]

Originally Posted by seeweda

Actually the state law in California is that any purchases you make online that are not taxed and are for use in the state of California are supposed to be reported on your year end tax return. If you bought a gift for someone in a state other than California than you would not need to report it.

I must say - I buy a TON of gifts.



For MYSELF! Lol

[ay221]

and Colorado has passed the bill.

[Clark Kent]

Most states will eventually tax Internet sales. I would give it two to three years before all the states charge tax this way.

[Vicon]

Originally Posted by ay221

and Colorado has passed the bill.

That sucks man.

[ay221]

Has anyone who bought items from Amazon and lives in Colorado received any kind of statement from Amazon regarding the tax? I have not made any purchases from there since the bill became enacted. However I wonder if they will put on the purchases I made before the law was enacted.

Edit, I found a good article. It mentions the total amount bought from the online store for the year has to be above $500 for them to notify the state and you.


http://www.boulderweekly.com/article...sales-tax.html

[anomynous]

Originally Posted by ay221

Has anyone who bought items from Amazon and lives in Colorado received any kind of statement from Amazon regarding the tax? I have not made any purchases from there since the bill became enacted. However I wonder if they will put on the purchases I made before the law was enacted.

They shouldn't be able to.......because that's illegal

[rdodolak]

Originally Posted by ay221

Has anyone who bought items from Amazon and lives in Colorado received any kind of statement from Amazon regarding the tax? I have not made any purchases from there since the bill became enacted. However I wonder if they will put on the purchases I made before the law was enacted.

Edit, I found a good article. It mentions the total amount bought from the online store for the year has to be above $500 for them to notify the state and you.


http://www.boulderweekly.com/article...sales-tax.html

Interesting state of affairs ... after reading the article it appears this new law only applies to Colorado residents. So non-residents living in Colorado shouldn't have to report or pay the sales tax for online purchases from Amazon. Wonder how they'll handle that since I'm assuming Amazon will still send a general notice to the Colorado Department of Revenue based on shipping/billing address. But then you could get into the arguement of whether Colorado can legally require Amazon to send a general notice to the state which would report non-resident purchases (e.g. violating privacy, etc. of non-residents).

[LordCrumb]

New Zealand businesses are wanting our Government to start taxing internet imports at any value. At the moment I believe its only when something is over a certain amount (few hundred i think) we need to pay tax. It will TOTALLY suck if they convince them to change the laws.