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Massachusetts' Big Brother Tech to Watch Taxpayers
rocketjam writes "The Boston Globe reports that the Massachusetts state Revenue Department has launched a new technology offensive which strives to piece together all the stray bits of financial information about individual taxpayers that is contained in various public databases in order to catch tax cheats. The databases have been around for years, but technology has only recently enabled the state to assemble and review the information in a time-efficient manner. The so-called 'Discovery' initiative is already bringing in an additional $1 million a week. While denying the state is playing 'Big Brother', the Revenue Department Commissioner, Alan LeBovidge predicted the state may eventually be able to track so much financial information on individuals that the state could complete the citizens' returns for them."
I, for one, welcome our new, um..... well, overlords.
"If you want to improve, be content to be thought foolish and stupid." - Epictetus
I'd be happier if it included corporations - the ones still 'located' in Mass. anyway.
Oh, that's just great... Especially since there's about fifty ways that even a simple tax return can be computed. You've heard of those experiments where they take relatively simple tax information for a fictional family, and send it to 30 different tax accountants, and the result is about 25 or more different returns, ranging from "you owe $1800" to "you're getting $2300 back"? Gee, I wonder which computation Massachusettes would take...
Anybody every notice that most big brother projects or legislation comes from New England first?
This is a test. This is a test of the emergency sig system. This has been only a test.
I suppose they think they can include the $20 my wife's employer paid me in cash the other day for fixing one of their computers (it was a pretty minor problem). Granted, $20 doesn't mean a whole lot in the grand scheme of things - but it is still possible, using greenbacks, to make one's financial transactions very hard to track. Consider people who receive paychecks instead of direct deposit, cash their checks at the grocery store, and keep their cash on-hand. How well do you track that?
!#@%*)anks for hanging up the phone, dear.
One would think this could be used the other way around to refund people who have overpaid. Who wants to take bets on whether they'll monitor for this as well? My money is on "not a chance."
One thing to note here is that it would be very easy for the state to fill out tax paperwork for the taxpayer in MA. I'm an MA taxpayer, and I did my taxes recently with TurboTax. After completing the federal portion, there were very few questions the state software needed to ask me.
- Did I want to pay the voluntary 5.85% tax rate instead of the standard 5.3% tax rate? (No!)
- Did I have any use tax items to declare? (Nope, and if anybody asks further I plead the 5th.)
- Would I like some of my tax money to go to the state's Clean Elections Fund? (Sure, why not?)
Beyond those little things, TurboTax could complete my pages of state tax forms simply by porting over the values from the IRS forms that had already been completed. So, since the state can already look at my IRS forms anyway, why not have them compute my taxes for me, and automatically send me the already-completed paperwork attached to the bill or refund?
As much as i hate the idea of any state having this much information on anybody, I also hate the idea of people getting away with scamming the gov't out of money (thats the politicians job) especially when the majority of the people getting away with this are the people who can afford to pay said taxes. After all how often do you hear of someone with a $20K/year job bragging about how much he hid away in various tax shelters? Of course the people that this would hurt most is those in the service industry, who claim only 10-20% of their income from tips.
drunk chemists
If you haven't had a chance to look at Massachusetts tax forms, I would highly reccomend them as reading for how not to write an informative document. It takes me half as much time to fill out the Federal 1040 Long Form, so I wuld be happy for the state to fill out my tax forms for me.
but they won't.
They'd never accept the liability for doing the returns.
We're left with all the intrusions and none of the benefits.
Am I the only one that wishes the IRS would sent me a summary of what has been reported to them? At least that way I could reconcile *before* signing my name to something.
t
It says "The Boston Globe reports that the Massachusetts state Revenue Department has launched a new technology offensive"...
It should say "The Boston Globe reports that the Massachusetts state Revenue Department has launched a new offensive technology"
"Here's your form. Fill it out. We could just do it for you, but we're too lazy for that. We'd rather see if we can catch you cutting corners. It's a fun little game we like to play around here. They give points for every evildoing tax form we catch. Brian's leading this week but I'm gaining on him...."
If you live in a state that has a sales tax, you can't really avoid taxes by shopping online, by phone, or by mail. Yeah, you avoid the sales tax, but by causing to have imported into the state a taxable item you owe a use tax, which is usually equal to exactly the sales tax you would have had to pay on an in-state transaction.
The problem is, for an individual, it's hard to collect a use tax on most things. Your state can't ask an out-of-state vendor for their sales records because they're out-of-state and therefore not under your state's jurisdiction. They can't really force you to give a true answer because you have the ability to plead the Fifth Amendment if you're ever accused of not paying a use tax you should have.
It's a problem the states have wanted to solve ever since online shopping got big, but there hasn't exactly been a breakthrough. The states that don't have a sales tax have no reason to help the states that do. Tax classifications can vary from state to state, or even county to county or city by city, so computing what tax is really owed is a complex task that nobody wants to do either. So, it's still one of those problems in the unsolved bin at this moment.
Most citizens' financial information is already known by the government. Working people pay taxes through paycheck withholding. The only ones who can cheat on their taxes in any significant way are corporations who are basically on the honor system when it comes to paying taxes these days. That's who this kind of system is designed to detect. Don't believe the hype. Working people are being ripped off by corporate tax cheats. The tax burden is being shifted to the middle and upper-middle classes while the elites get off scott free.
- Hail to our fearless misleader! Fool speed ahead!
Is that the reactions are too easy to predict. Personally, I like seeing tax cheats get caught, because it means I pay less. As long as there a legitmate system for addressing grievances, I don't see a problem. Big Brother is an overused cliche.
Well, unless those people cashing their checks are being paid under the table, they are probably having taxes taken out for them based on their income linked to their social security number. It doesn't matter how you cash the check, the company has filed what it paid the person with the social security number to the government on their tax return.
And even if taxes aren't taken out, if the person is making over $600 he/she's being 1099'd and again the business is going to be reporting that amount to the government on their tax return.
There are a number of things that still won't be accurately tracked, but it's going to be remarkably easy to keep track of what people are earning from honest and legally operated businesses.
--
RumorsDaily
Now where the hell is the syrup?!?
I swear, if that place was run by loving, caring democrats, this wouldn't be happening.
guns kill people like spoons make Rosie O'Donnell fat.
Land of Liberals, Loons, and DOUBLE TAXATION
Greetings from Taxachusetts, the Land of Ted the Lifeguard!
The Commonwealth of Massachusetts has an entity called the Massachusetts Department of Revenue. The DOR puts the IRS to shame.
File your taxes late with the IRS, they hit you with interest and penalties. So be it. They are the IRS, they are above the law.
File your taxes late with the Mass DOR, they hit you with interest and penalties. And then they hit you AGAIN. Yes indeedy, folks: it's DOUBLE-DIPPING DAZE FOR THE TAXING AUTHORITIES!!!
Bottom line: a little-knownstate law allows the taxing authorities to DOUBLE your base tax, interest, and penalties.
Be warned: DO NOT BECOME REMISS IN PAYING YOUR FAIRSHARE(tm) in MASSACHUSETTS LEST YOU END UP PAYING IT TWICE.
This is fact, not troll or flamebait. But it does help to explain why the Commonwealth is a pro-welfare-parasite, anti-working-taxpayer zone.
Could it be that the lack of Republican representation hereabouts has something to do with this?
Good work.
I know I'm trolling. No need to remind me.
I've hit Karma 50 and gotten a Score:5, Troll... I win!
I'm not a lawyer or a legal expert but something about pulling this data together and possibly going on "witch hunts" smacks of "unreasonable search..." Either way, it's scary.
Happy Trails!
Erick
http://www.busyweather.com/
I work a number of different jobs throughout the year, and have to deal with the considerable annoyance of having each one attempt to deduce what my yearly earnings are going to be and tax me accordingly.
The jobs that pay me $200/week (even if I'm only working two days there) will take out almost no taxes becuase they assume I'm making $10,000/year. When I'm paid $2000 for one week of work, I get taxed on the ludicrous assumption that I'm going to be making $100,000/year. Neither assumption is accurate and both leave the government taking out a grossly incorrect percent of my wages in tax anticipation.
Why can't the government compile a system that will help companies to estimate what my tax payment should be not simply by what I'm being paid in the current week, but by looking back over the whole last year and seeing how much I've made this tax-year (through different employers) and what that average income is going to end up being near.
Better yet, why can't we come up with a system that doesn't depend upon weird estimates as the year goes on, but allows you to announce at the beginning what your income is going to be near and then simply take out the percent that that tax bracket would warrant. Then, if you were accurate, you'd have no refund and no taxes do and you could just fold everything up and go home.
Damned taxes.
--
RumorsDaily
..but the shouldn't. Or rather we (you, as I'm not in the US) shouldn't let them.
Not because it is Big Brother, but it would be all to easy to just add new taxes whenever the state needs money.
In that the taxpayer has to relate to his own taxes, instead of just paying another bill every month, there is a substatial amount of government control by the people.
How many you guys check your phonebills if it is $10 or even $20 above average one month? Sure, alot of people do, but even more just pays. You don't want this atitude towards taxes too!
They call them "tax cheats", we call them "people who can't pay taxes because if they did, they'd starve to death or couldn't cloth themselves". Interesting how in today's world the goverment's mouth comes before your kids' mouths, huh? But that's an old arguement. Just because unenployment is skyrocketing, our country is going into great debt, and the US prison industry is the fastest growing of them all is no reason to fear this one.
So, lets say the goverment decides they want to pass a totalitarian-like tax, say something rediculous like internet tax or media tax; they now have the enforcability. So if you decide to feed your kids instead of pay your taxes, guess what happens? Right into the knocker. And if orphanages become overfilled with kids, those kids go into any home that wants them, for any thing.
There are other people who don't pay taxes because they simply can't afford to. They have to pay rent to their slum lord to stay in their nice shithole apartment, or pay for food, clothing, college, car, car repairs, gas, etc. These people also have home buisnesses; a lot of computer technicians have started their own repair shops or networking contracts out of their home, and they live contract to contract and make barely enough to get by. What if they had to make 40% more?
Candy-Coated Knowledge
"If cash were invented today, it would be illegal."
"Information wants to be free", right?
Hasn't this been the whole point of the last century of effort in the field of computing? The constant push for faster processors? The drive for larger, faster storage, in smaller form factors? The constant advances in memory efficiency and effectiveness? For generations now, everybody has been working for smaller, cheaper, faster, computing--working very successfully at it.
Everybody wants it. Everybody wants their information to be more portable, more accessible. That's what the Internet is for. That's why relational databases were invented. That's why SQL and cross-platform development tools are so important. That's why everybody is lusting after Wi-Fi.
It's all so that more information can move with greater speed over greater distances, and be organized and studied with greater ease. That's what you've been working for. That's what you want. It's what everybody wants. The academics who used the original ARPAnet want it. The government wants it. The Open Source community wants it. Microsoft wants it. Your boss wants it. You want it. I want it.
Privacy was an illusion, perpetuated for millenia by a lack of technology. But the information is out there. It always has been. And you want it to be free. Now, you're finally getting what you want, and it's only going to get cheaper and easier from here.
Everything is going according to plan. Your plan.
Any sufficiently well-organized community is indistinguishable from Government.
There are those who argue that having both individual and corporate income taxes results in double taxation, since whatever corporations take in goes to individuals, whether employees or stockholders, who are taxed on that amount. So let's end double taxation by abolishing the income tax for individuals and taxing only corporations. This is the only way to avoid an immanent future where governments intrude far-too-far onto individual privacy rights.
Would people just avoid doing business in corporate form in order to avoid taxation if we did this? No, most people would rather have the protection from individual legal liability which "corporate cover" provides. Tax would be seen as a form of insurance well worth it for any enterprise facing significant liability potential - which is any business large enough to have enough customers that a statistical likelihood of injury due to its products or services exists.
Of course criminal corporations (like the Mob) might start ducking taxes. Oh, wait....
"with their freedom lost all virtue lose" - Milton
Here's a timely story for those of you filling out your federal tax return for Uncle Sam this spring.
According to my tax preparer, one of the ways they decide whether to audit a particular return is to correlate the adjusted gross income against ZIP code. Generally, areas segregate into rich and poor neighborhoods.
Persons in poor ZIP codes who have unusually high incomes would be singled out (Mr Coke Dealer that wants to avoid Al Capone's downfall - income tax evasion) on the one hand.
Then, people in wealthy ZIP codes with no visible means of support (again, illicit gains and unreported income).
It all goes to show that intelligent data mining can make much better use of the information already available. No need for John Ashcroft to review my frequent shopper card purchases.
"Provided by the management for your protection."
Those darn right wing republicans! Taking every chance they get to take away our freedom. If we can get President Bush out of the Whitehouse, then maybe we start getting rid of the vast amounts of Republicans in the Mass. State Gov't.
I don't much care for the invasion of privacy...but I do like the idea of not having to do taxes. Grumble. Grumble. Grumble.
"Give someone a program, frustrate them for a day... Teach someone to program, frustrate them for a lifetime."
Dealing with states on taxes, specifically non-income tax related items is somewhat of a joke.
A friend who has a large retail operation on Florida once received a visit from the state. State said, you owe $91K in uncollected sales taxes according to our records. The state was really a single rep who most likely would receive incentives based upon the amount he collected.
Needless to say my friend hired an outside accountant to review everything and look at the claims. With some interesting results.
State agent returns to collect the money. My friend presents him with documentation and says, "we reviewed everything, and looks like we don't owe you $91K, in fact we overpaid $15K, so we need a refund."
Agent looked everything over, and said, he'd drop the claim and they'd call it even.
Someone please tell me how this is a violation of my rights? Seriously. I am normally protective of my liberties but I do not see the connection.
Should the poster feel violated that he may get caught cheating on tobacco taxes?
By the very act of taxing tobacco, hasn't the government been already GRANTED (by the people) this power? I'm assuming that data existed before for people who did NOT cheat, and made some kind of non-cash transaction that required paperwork.
Tax cheating is not a "questionable accounting practice" -- it's shirking your societal obligations and shafting your neighbor with your bill. It's a crime and obviously the penalties are a joke. Forget fining them... send them to Texas for 12 months, so they can make blue jeans and sneakers in the state jails.
Or does the poster feel 'violated' because the government "knows" he purchased tobacco? Woopie. It's a taxable item.
It's not as bad as say, the government illegally tapping your telephone because you buy cous-cous and goat cheeze, violating due-process, Geneva convention un-enforcement, or even FCC censorship crackdowns for the public display of a female nipple.
Please find a real issue to complain about.
I'm amused that some people think this helps them catch corporate catch cheats. It doesn't. Many of them are serenaded into a state with subsidies and tax breaks anyway. Even if they weren't, tax shelters are so prevalent and hard for the IRS to track down that it's estimated that 50-80 billion a year (nationally) is lost to corporate tax evasion. You could fund free health care with that. But you can't, not until the government chooses to get tough on tax evasion... and to pull that off means they either also have to get tough on importers (workers rights/health care/environmental laws in other countries) or stop the running Free Trade joke and have a more protective economy.
All your preview button are belong to Hello Kitty.
That's an old story. This year's version actually allows you to install the software on multiple PCs in a household in the license terms, most likely as a reaction to last year's scandal.
"the state could complete the citizens' returns for them" Great! They going to pay them for me too?
When all of your wishes have been granted, many of your dreams will be destroyed - Marilyn Manson
Why is it so fashionable these days to call things Orwellian when they obvious aren't. I recently saw an excellent BBC documentary on North Korea, and it really reminded of 1984.
Unless you've been commiting serious tax evasion, I doubt you have much to fear. And if you have, I hope this new initiative helps to catch you. People not paying tax raises the amount those of us that do have to pay.
Decode these
They've been plotting for years...
1888 Franklin St.
so instead of demanding a simpler form, you'd be willing to have them calculate something owed to them that's near impossible to double-check?
even credit card companies are not that dubious with their policies.
something tells me that the same people who are willing to accept a basically unaccountable bill from the government are the same people who don't bother to vote or pay attention to what bureaucrats are doing with our tax dollars.
I know this may seem obvious, but it will probably just make cash a more often-used form of payment. At least, when that's an option. This is IMHO just another case of the crack-down on the "mostly" law-abiding citizens of the country. There are much worse things the government should be spending resources on.
But of course, it's still all about the $$$. Easy revenue stream, big target.
If I thought they could get it right, I'd be all about that. No more accountants, no more paperwork, just pay my freaking taxes and be done with it.
Begin hidden conservative agenda: Of course, it'd be even easier for them to do if they implemented a flat tax across the board. :)
Some may praise the tax collectors for getting all the money from tax fraudsters. But there is anoter side of this that should be considered. I don't know the stats for MA, so I will use the IRS as an example. The IRS web sites says that it has $2.5 billion that it owes people for the year 2000. It says that if the money is not claimed then the IRS keeps it for good. There are a few issues with this.
* If they know that they owe $2.5 billion then they must know who they owe it to. So why do they not return it? Compare that to what happens if you do not give them money they think belongs to them.
* If they do not want to return it to its owners then why not disperse it through universal income tax credits rather than keeping it? In other words, they engage in what for a private citizen would be "tax fraud".
* So some people cheat on their taxes. This is offset some by the IRS keeping money that is not theirs. Thus in the interest of fairness, until a tax collection agency cracks down on themselves kepeing money that is not "theirs" (though saying a tax collection agency "owns" any of the money it collects is a bit absurd...), we should oppose such agencies cracking down on us.
"The State is that great fiction by which everyone lives at the expense of everyone else." -Frederic Bastiat.
good ol "Taxachusetts"
See Sig! See Sig Zig! Zig Sig Zig!!!!!
You obviously don't understand the term "skyrocketing". Skyrocketing unemployment would be that of a country like Germany which is around 10%. Ours is going down -- the opposite of skyrocketing. The current unemployment rate is lower than the average unemployment rate of the "booming" 90s. Much lower than the highly enlightened European Union. Much of our country's history has been spent in debt, the key is the percentage of the debt versus the GDP of the nation. Debt is not the problem, its the ability of the nation to manage that debt and make the payments in relation to the country's ability to produce goods and services that people want to obtain. And there is a good reason that the prison population is rising, there are bunch of jerks in this country that need to be locked up that we haven't been locking up in the past. That is why we are seeing a declining crime rate for the last several years. It is very hard for criminals to prey on society when they are locked up behind bars.
Also, the best thing this Government could do is take food out of kids' mouths. Have you seen how freaking fat kids are today? My God, its like we have an army of Fat Alberts running (er, walking) around these days. In fact, the biggest health risk for "impoverished" American children is obesity. If you want to see real poverty it's not in this country. Our poor get cable TV.
Strange women lying in ponds distributing swords is no basis for a system of government.
"While denying the state is playing 'Big Brother', the Revenue Department Commissioner, Alan LeBovidge predicted the state may eventually be able to track so much financial information on individuals that the state could complete the citizens' returns for them."
Automated government wallet-raping, coming soon to a tax office near YOU!.
[Avg Citizen] "Please just tell me how money I have to pay to not be thrown in jail."
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
If I buy something in another state with a lower tax, in theory I have to pay taxes to my state to make up the difference. But it doesn't work the other way around. I don't get a refund for buying something in a higher tax state when I live in a lower tax state. If the government(s) don't seem to play fair, but rather to maximize profit, can you expect citizens to do any differently?
Case in point. I moved from a state with 6% sales tax to one with 5%. I had to retitle my car, and if I had bought it in a state with a lower tax, I would have to pay the government of my state the sales tax difference between my state and theirs - but there is no refund for a higher to lower. And this isn't just for people who just bought their cars in another state - I bought the car 2 years earlier.
I have blog like everyone else
...gov'ts would have done this earlier - while the Patriot Act presumably made some information easier to get that gov'ts would not have otherwise have gotten, the main impetus driving this collection is the ability to gather personal and financial data using the internet. Once that capability came along, it was only a matter of time. Bush didn't make it possible - the tech did. Once the capacity is there, people want to use to best enhance their power, and bureaucracies (sic) are no different.
Also remember that both Democrats and Republicans gave us the Patriot Act and its spawn - while Ashcroft (and by consequence GWB) can take the blame for some of its misuse, they didn't give themselves this power - our elected representatives did. Something to remember come November.
>
> doing it yourself, or having a 3rd party accountant or software do it is the way you keep the revenue service honest - true to their own convoluted, overly-complex rules.
Doing it yourself also makes it blatantly clear to you that the tax code has nothing to do with raising revenue, and everything to do with social engineering.
Seriously. With respect to those who died on the Challenger, did we really need Congress to direct the IRS to spend time writing up "Astronauts Who Die In The Line Of Duty" guidelines for the 2003 tax year? Do we really need laws that micromanage our lives to the point that seven people on the entire planet (maybe 6, I'm not sure if the law covers the Israeli, but if he earned that income from NASA, perhaps he also has to dual-file with the IRS) get a tax break?
If the goal of tax policy is the collection of revenue to fund projects that the State has decided to commit resources to, the answer is "no".
If the goal of tax policy is to remind the serfs who is Lord and who is Serf, and that the Serfs had goddamn well better keep in their place if they know what's good for them, then the answer is "yes".
Do your taxes by hand with a calculator. And decide for yourself on the basis of your observations, what the tax code is really all about.
I'm not gonna go Randroid and suggest that taxes should be abolished. I'm not even gonna go with my personal opinion that taxes should be reduced.
As someone who lives in America, the land that spends $200 BILLION DOLLARS A YEAR in complying with ITS OWN GODDAMN TAX CODE, I am going to go so far as to say the Internal Revenue Code needs to be scrapped and replaced with something less complex, even if tax rates rise under a new system.
Either the US tax code is radically reformed, or I - someone who pays more in taxes than I spend on all other expenses, including my own food, shelter, and entertainment combined - will fucking walk to any country that'll have me.
I don't fully understand your situation. If you were only working somewhere for two days, or a week, or similar.. you'd receive a 1099, not a W2. There are no tax withholdings in a 1099'd ("subcontractor") position. I, like many of us, have been self-employed for years and am more than familiar with this mess. Please explain your situation so that I can better help.
Was it done by the Congress as demanded by the Constitution?
Yes. Or in as much as this war could have been approved by congress. Let me clue you in on a working of the government. All money and spending HAS to be approved by congress. They approved the funds and the usage of troops in Iraq.
T Money
World Domination with a plastic spoon since 1984
Ours is going down -- the opposite of skyrocketing.
2000 - 4.0%, 2001 - 4.7%, 2002 - 5.8%, 2003 - 6.0% That doesn't look like it's going down to me sport.
Allow me to direct you to here and here. The first link gives yearly unemployment averages from 1948 to 2002. The second link, to the homepage, says the average unemployment numbers for 2003 are 6.0%. As for the "booming 90s", 1990-1999 yield a simple average of 5.75% Lower than present. Now if we take the numbers from 1994-2001, the years the Clinton administration is mostly responsible for, you get 4.925%.
Much of our country's history has been spent in debt, the key is the percentage of the debt versus the GDP of the nation. Debt is not the problem, its the ability of the nation to manage that debt and make the payments in relation to the country's ability to produce goods and services that people want to obtain.
A budget deficit doesn't paint the whole picture? Brilliant deduction! Let me guess, you went to college for an Economics degree, didn't you? 'The country's ability to produce goods and services that people want to obtain'... that sounds directly related to our trade deficit. Which is also at an all time high. In terms any American can understand, this country has lost it's job and is now living on the credit cards.
I won't even bother to respond to the rest of your flamebait. How this post got modded 4 Interesting is beyond me. I'm beginning to think Slashdot is the target of astroturfing.
And why did he stop taking physical exams 3 years before the end of his service? He was supposed to take one every year to coincide with his birthday. Bush passed an exam May 15, 1971, but in the summer of 1972 he refused to take one, and lost his flying status because of it. In the summer of 1973 Bush was still serving in the Guard, but no records exists to prove he ever took a physical. In fact, there's no evidence that in the 42 months between May 1971 and the time he officially discharged on Nov. 21, 1974, Bush ever took an Air Force physical.
His failure to take the physical in 1972, and his subsequent loss of his flying status, should have triggered a disciplinary review, copies of which would be contained in Bush's military file. But none exists. Where are they?
And why, after the government spent hundreds of thousands of dollars to teach him how to fly, did he apply to be transferred to an Alabama postal unit?
What's that sound? That's the sound of AWOL.
A. Because if they hold your money, they know they'll get it. Plus, the spectre of a refund is incentive to do your taxes.
B. Because then they wouldn't get to hold your money interest free. (Hey, interest free loans are great -- given inflation, the borrower technically makes money on them)
I think Maryland must be doing something similar. Several months ago they hit me for something like $5000 for 2001. The problem with this was that I lived in California for the entirety of 2001, with the exception of the last three weeks. Two of those were spent in transit across country, and the last was spent in Philadelphia. No Maryland anywhere in there. However, I did move to Maryland breifly in Feb 2002, filed my taxes, stayed a while longer and then moved to Taxachusetts. And because I filed my taxes there they decided they were entiled to a cut of 2001 as well as 2002 (they already had their cut of 2002).
So I sent back a reply explaining this and haven't heard from them since.
If you're honestly asking, a "sales tax" is a tax based on a percentage of the purchase price of an item. It's very similar to the VAT that many other countries have, with some key differences:
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Hope that clears things up for you.Unlike VAT, sales tax is collected only once on an item through the manufacturing and sales process, whereas with VAT (if my understanding is correct) it's collected at each point in the supply chain, minus what has already been paid. For example, with 15% VAT on an item made of metal, a mining company might mine one dollar's worth of metal and sell it for $1.15, with the $0.15 going to the state. Then the company that bought the raw metal might make parts out of which are worth $3, so they'd charge $3.30 and send $0.30 to the state. (That's $0.45 less the $0.15 which has already been paid.) And so on, and so forth, until the product, worth $10, is sold in the store with a sticker price of $11.50.
On the other hand, in the US, the raw metal would be sold for $1 with the state getting no money, and the part for $3, and so on and so forth, until the product winds up on the shelf listed for $10.
The price of the sales tax is not included in the purchase price of the item. With the above example, you take your item, which is labeled as $11.50, up to the register and that is what you pay. On the other hand, the item is marked $10 on the shelf and the sales tax is added on at the register. This stems mainly from the feeling that having the tax included in the purchase price would be a form of hidden taxation (as some people feel the gasoline taxes are). So depending on the locality, the cashier will ask for between $10.50 and $11.00 once your purchase is rung up.
Which brings up another point. The sales tax is not uniform across the US. Each state can choose to implement a sales tax or not. In states which implement the sales tax, it is not necessarily uniform across the entire state. For example, Indiana has a 5% sales tax, Pennsylvania has a 6% sales tax, and the city of Philadelphia has a 1% sales tax (on top of Pennsylvania's 6%, so you must pay an additional 7% of the purchase price in taxes). For someone living in Phoenix, Arizona, the situation is even more complicated. The state charges 5.6% (from what I could find), the county charges 0.7%, and the city charges 1.8%, for a total of 8.1%. Basically, the amount charged varies by ZIP code (the US term for a postal code), and oftentimes even within the same ZIP code you might have different tax rates. This makes it a nightmare for a small business, for example, to collect and remit the proper taxes to all the different localities.
Following the last point, mail-order (here I am including catalog, telephone, and Internet sales) businesses thus tend to collect sales taxes only for states in which they have some form of physical presence; otherwise, the state has no jurisdiction over the business. To my knowledge, though, all states which have a sales tax have a "use tax", which applies to items purchased elsewhere which have had no (or fewer) taxes paid on them. For example, a Pennsylvania resident (6% sales tax rate) who drives to Delaware (an adjoining state with no sales tax) and purchases a $100 video card is supposed to declare this on his tax returns and pay the $6. If he was on a trip to Indiana and paid $105, he is legally required to pay the extra $1 but is not responsible for the other $5. However, if he purchases the item in Phoenix, paying $108.10, he does not owe the Pennsylvania state government anything at all.
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Runnin' around, robbin' banks all whacked on the Scooby Snacks...