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Are You Reporting Your Internet Purchases?
theodp writes "Over the next week, taxpayers in 19 states will be confronting new sections on state returns that ask them to fork over unpaid sales taxes for items purchased out of state, including Internet transactions. A NY Daily News editorial characterized the addition of use tax to state returns as a rip-off and advised taxpayers to fill in a zero on the line, although an accountant suggests doing so may even be worse than just leaving it blank and put you on the line for tax fraud."
Where is there a list of states participating in this? TFA only mentions two, and a lightweight Googling didn't reveal much more. I'm a Mass/Taxachusetts resident (so I consider the chances high), but I certainly didn't see anything on my state return about grey-area sales taxes.
Speaking of which, good luck if they wanted to collect. As the article mentioned, the honor system doesn't work. Not only that, being the organized person that I am, clearly I have kept an accurate record of every internet transaction I made in 2003. In short, the only way I can see these folks having a prayer of getting my money is by making a national system of collecting these taxes that is compulsory for retailers to take part in. Otherwise, it's doomed.
Auto-reply to ACs: "Truly, you have a dizzying intellect."
No
I know this has been implemented in New York.
Alabama is one of them, though it doesn't apply it to only internet purchases. It applies to any thing that you bought out of state and brought back home.
C:\>
of course the honor system works if they find i owe thousands of dollars, i will gladly pull it out of my ass
Hmmm... I live in Nevada and I'm wondering how this works. The article says that all states have use tax, but it is collected on the state income tax form. What does a fine upstanding citizen, in states like Nevada where there is no income tax, do to report tax on his online purchases?
Now if that wouldn't be a violation of the Commerce Clause, nothing would be.
I understand there is an issue of fairness, assuming a state which doesn't collect sales taxes or has a very low rate sells a lot of merchandise to people in a state with high sales taxes, and local sales taxes (i.e. California)
A feeling of having made the same mistake before: Deja Foobar
That line has been on my tax return for as long as I can remember. Of course when I first started doing taxes we didn't have internet sales, and it was intended to only apply to mail order stuff. I don't know anyone who put anything in that line back then, and I don't see any reason to expect that to change now that internet sales should be added in as well.
$6.66 should get the message across loud and clear.
California is another...
Something everyone should be forced to read
What would I owe if I bought used items online?
I'm not reporting it.
I'm curious, what part of Article 1 Section 8 of the U.S. Constitution don't these boneheads understand?
I know the states get around this by calling it a "use tax", but come on. Do you really expect me to keep track of everything I've bought across state lines just because you charge so much sales tax that the price of shipping makes up for the difference?
Mass is definitely one of the states. It's on the tax return under "use tax".
This is my sig. There are many like it, but this one is mine.
As a brick & mortar retailer, I'm sick and tired of losing businesses to cheapskates who want to shave a few pennies off, and don't give a damn about the businesses they choose to support or not to support. I say that that's the price you pay for shopping online (along with not being able to see the product, not know who you're buying it from, shipping cost and time... etc) It's about time that the playing field is leveled. Personally, I can't wait until this country turns into nothing but a bunch of Amazon.com warehouses with residential apartments in between, with little to no retail. THEN consumers will finally understand what they got themselves into, and I'll be long gone.
From the article:
All states have provisions for "use tax,"
This is not true. New Hampshire has no sales or income tax. There is no use tax provisions. There are a number of other states without sales taxes and/or income taxes.
It makes me rather doubt the competence of the author who apparently didn't do basic research on his topic.
-- Dan Jenkins, Rastech Inc.
If there's one thing I've learnt about government, it's far better to fight for pardon than to for ask permission. How do you know how far you can go, if you never even bother to test the waters. It reminds me of those movies where everybody was afraid not to cower to local bully, but if they all did they would all have been better off.
By the way, we do have sales tax, but it's collected at the point of sale. Also we have horendous property tax...
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
Your naivite needs to be addressed, while I am not even a paranoid person, I can think of 2 ways where they can go after you:
1. Get all your credit card info. When was the last time when you used cash (money order, etc) for your Internet purchases? Do not kid yourself, the banks would happily submit your finincial transactions to IRS for audit at the first request...
2. Carnivore. Nobody know what it is capable of. Would be trivial to monitor all e-commerce transactions if needed. SSL is not that secure...
Code poet, espresso fiend, starter upper.
It worked on Capone...
Dewey, what part of this looks like authorities should be involved?
You know, this may actually be a good thing though - if more people get upset about their high rate of taxation, maybe they'll finally put pressure on the government to curtail spending.
Oh well, I can dream, can't I?
If you want people to pay the tax it needs to be calculated and collected at time of purchase by the merchant.
If someone feels that this will kill the ability for some merchants to do business online, possibly, though it should not be any bigger of an inconvenience than figuring out shipping rates was when Ecommerce took off. Even so, I don't think it will hamper online sales anymore than consumers having to collect and collate receipts for taxes will. Plus there are a number of sites like Yahoo that will be able to use this as a new feature for their online malls.
Now, this galls me on several levels. One, they assume that every penny you earn is to be spent on sales-taxable goods in the Great State of North Carolina. Two, you definitely get the feeling that if you don't put some amount on the line, they'll be pulling your return for audit. It's almost a big brotherish attempt at coercing additional tax monies. Furthermore, if you buy something in say, SC, with a sales tax of 5%, they expect you to pay the difference between that rate and your rate.
Speaking of which, good luck if they wanted to collect. As the article mentioned, the honor system doesn't work.
That's exactly the problem they had with the income tax--once people realized how much they were expected to fork over, they refused. The solution in that case was to take their money before they ever got it. Now, states have some real control over employers and retailers within their jurisdiction, but they can't do a whole lot outside of it. I can't see this being very effective.
Of course, it's also convenient to have a system where everyone is a criminal, because you can use that against them on a selective basis.
One man's -1 Flamebait is another man's +5 Funny.
Sure am glad I live in Delaware, where we have no sales tax.
PNWED!
that's easy, you just don't sign your return and have a note attached to it that says you won't incriminate yourself. There's already precedence for this, too lazy to google it hoever =0
Don't call my crazy, that's what they called me back in the home!
There are people out there who say that there is no legal requirement to pay income tax to the federal government. I read last night about a guy that used to work for the IRS who resigned after doing his own research and coming to the conclusion that these people actually have a case. He hasn't filed a return since 1999.
How these people propose to fund the building of the roads that they will march on in protest is unclear, but it's an interesting case they put forward from a legal point of view.
Drill baby drill - on Mars
It's a good thing I filed my taxes last year before this law went into affect.
Taxachusetts counts. There seems to be a big push to pay use taxes on items not purchased in-state. As I recall there is even a box this year on the income tax form to declare these unpaid taxes. Also remember that Mass. has invested heavily in a new system to catch tax cheats. From the Boston Globe Archives:" STATE'S NEW TECHNOLOGY GATHERS INFORMATION TO FIND TAX CHEATS Published on February 15, 2004 Author(s): Bruce Mohl, Globe Staff If you get the urge to fudge a bit on your taxes this year because you think, "Who's going to notice?" think again. The state Revenue Department is watching. The agency has launched a technology offensive with the goal of pulling together stray bits of information about every Massachusetts taxpayer, searching for clues that would indicate who isn't paying the taxes they owe." http://www.boston.com/business/taxes/articles/2004 /02/15/states_new_technology_gathers_information_t o_find_tax_cheats/
Here in N.H. there is no sales tax. I often forget that other states even have sales tax. It seems I am only reminded when I am on vacation, and the clerk wants me to pay $10.55 for the item that is clearly marked at $10.00. Then I get this dumb look from the poor person behind the register, "Uh, sales tax?"
It makes me wonder, how our state can run without sales tax, and without state income tax. I mean, it's a wonder we survive at all! Now, look at Mass, and California, loads of taxes! Boy, those people sure are better off with all those taxes and government programs! But, I digress.
Seriously, if you live in NH, and you buy goods over the Internet, no tax, case closed, Live Free or Die!
Modest doubt is called the beacon of the wise - William Shakespeare
Auto-reply to ACs: "Truly, you have a dizzying intellect."
We don't need the luxury of schools, roads, etc.
Did VA Software get audited, or what?
"I remember hearing a governor say that at some point, it's going to come down to having his highway patrol stop all the little brown (United Parcel Service) trucks and see where the stuff is from and where it's going."
I picture shipments being stopped in customs or requiring documentation in triplicate as to contents and recipient state and whether states sales tax has been paid. "Sorry, ma'am, but we can't let you take that sofa into California without these forms filled out completely."
I was taking one day at a time, but then several days got together and ambushed me. (from a Rhymes with Orange comic)
Ohio is one, but then again it was on *last* years form as well. In Ohio at least it's just application of the use tax laws that have been on the books forever to a new area which the states fear could significantly impact revenues. In other words they are just pointing out that you need to report this new area just like you always were, of course from a bit of old research it seems that use taxes were never a big source of revenue due to their inherint unenforcability.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
All states have had "use tax" on the books for as long as I've known. The problem is that interstate commerce is the realm of the federal government, as outlined in the Constitution, so it's unlikely that these taxes are constitutional. Of course, consult your own attorney, but I have searched lightly and not found any court case that has upheld them. The bottom line is that, Constitutionally speaking, no state has the right to tax or otherwise affect interstate commerce.
Sorry for anonymous, but I don't even want to deal with this.
I'm surprised that we're hearing about this now. It just reinforces my theory that the majority of taxpayers have no clue that a "Sales and Use Tax" exists in their state, and has existed before the Internet was commercialized. It must cost a lot to enforce this, and in my home state, they make it very difficult to be honest on your S&U tax form (because revealing such information will most likely make them look into your buying habits in the past, or those of your spouse). Since the penalties include jail time, it is akin to self-incrimination if you just pick up and pay for the first time.
Fred
"A fool and his freedom are soon parted"
-RMS
As to what states are "adding" this - actually only CA and NY are new to this. The article says they are joining 17 other states that ALREADY did this.
I was taking one day at a time, but then several days got together and ambushed me. (from a Rhymes with Orange comic)
Might want to address your spelling, while you're going around addressing things.
Article I, Section Nine:
No Tax or Duty shall be laid on Articles exported from any State.
Additionally:
No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.
One state cannot tax a purchase made in another state. Taxes are too high as it is.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Do I have to pay a use tax on the cost of my Slashdot subscription?
Remember the days when Republicans were the party of fiscal responsibility?
I like the concept here.
We're the government! We don't think we're taking enough of your money! Therefore, we're going to start taxing you more! We're not going to tell you why, or where your money will go! You have to wait to find out! And even then, it'll be a real bitch to figure out exactly what we're doing with it, and some of it will be intentionally hidden from you!
Hooray for the government! yay!
Fuck that, buncha goddamn assholes ARE ripping us off. Fuck their wars and their huge ass government and their pork barrel highway bills. Fuck their wages, fuck them. Fuck their "faith based initiatives". Fuck their pet projects and their payoffs to foreign nationals.
Alito: A vote for Alito is a punch in the eye to put that bitch back in her place!
The US Constitution forbids interstate taxation. I.e., a state cannot put up toll booths on its borders and tax out-of-state purchases. However, that is EXACTLY the purpose behind Use Taxes.
If someone says he and his monkey have nothing to hide, they almost certainly do.
W00h000! Not a problem for me and the rest of us idiots that don't know how to vote ;)
In olden days, most of the purchase used to be within state and making out of state purchase was very expensive. So the state level sales tax made sense. In today's world, the sales tax at state level makes no sense. Transportation, shipping is way cheaper than they used to be. There should be federal sales tax common for all state and each state would get contribution (from federal govt) based on where the product was purchased/shipped.
Speaking of which, good luck if they wanted to collect. As the article mentioned, the honor system doesn't work.
Tell that to my cousins who got audited. The IRS nailed them on this since they had made some rather big ticket purchases.
Using the shipping address just means that I now start shipping my purchases to my office or to a mail drop somwhere. Still doesn't prove that I bought what they think I have...
Only the most psychotic conspiracy theorists would believe that the FBI shares its intelligence data with the IRS.
They don't expect you to. What they are doing this for is so that when you willfully fail to declare your out of state purchases they can go after you for tax evasion.
I just did my taxes with H&R block. I specifically ask whether there needs to be any Internet purchases claimed etc etc. Basically I am avoiding doing taxes twice / audits etc.
H&R Block said NO!!
You insensitive clod!
;-)
We don't have income taxes, either
There are four boxes used in defense of liberty: soap, ballot, jury, ammo. Use in that order.
I know that Utah does this, or at least they did last year.
infested with jello like fishes no melotron wishes
And I have yet to report anything on that line. Not that I feel I am trying to rip off the state, but having at one time worked for a mail order company, who often did *NOT* have to charge sales tax on out-state purchasers.
I do not see how ordering something from a company who is based soley out of, say, CA, is any different than if I do it via mail order, or over the phone ordering.
I can see paying sales tax if I order from a company like Crucial memory, who most likely has offices in Michigan. The line on a state return though, just smacks of "you didn't spend all your money in-state, but we're going to pretend you did." Does that mean the next step will be to make people pay their state sales tax on items bought outside the state?
Will their be border crossings erected between Michigan and Ohio, and you'll have to declare what you purchased in Ohio, and pay the Michigan sales tax on it?
Sheesh.
Jason A.
Do you see the FNORDS? I refuse to post anonymously, as I am fireproof!
A smarter way would be to have a smarter tax system, like a Value-Added Tax. Tacking sales tax on as an after-thought is stupid, and creates many more problems than it solves. With a fairly simple system (Person A hands a stack of bills to Entity B; B hands A a Widget; B makes an entry in a book) its worst flaws aren't really exposed. With side-spread digital transactions for digital goods it simply cannot be maintained.
This isn't as much "normalization" as it is "don't take so many drugs when you're designing tables."
States with sales tax lines on their tax forms include Alabama, California, Connecticut, Idaho, Indiana, Kentucky, Louisiana, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Rhode Island, South Carolina, Utah, Vermont, Virginia and Wisconsin, according to the Federation of Tax Administrators.
Read more about it here.
We just had a state legislator state that he wanted to write a bill that would make government buildings follow the rules of Fung Shui. I have have to pay more taxes for *that* motherfucking bullshit?
Schools? All the money goes into the pockets of the administrators and other scammers. The amount of money we already spend per child should be churning out armies of geniuses.
So take your self-righteous, naive idiocy and cram it in your ass.
This isn't unique to the internet - most states require that you pay sales tax on all products bought out-of-state, either when on an out-of-state shopping trip or through a catalog.
The IRS has a pretty comprehensive PDF online debunking most of these schemes.
4 ,1,7068670.story?coll=la-home-business
[registration required, blah blah]
http://www.irs.gov/pub/irs-utl/friv_tax.pdf
While clearly the IRS is biased, they do cite many court cases that have legal precident covering many of these loopholes or misreadings of the tax code.
There was also a related article in the LA times last week which touched on the same topics
http://www.latimes.com/business/la-fi-taxman4apr0
is deprecated..welcome to the internet superhighway.
Fuck them.
When I came across this last year, it surprised the hell out of me (definitely merited a "WTF?"). I generally don't keep track of my online purchases (in as far as differentiating them from non-online purchases). And what about things I've bought from outside the country (import CDs et al)? Do those count? Seeing as how I didn't want to get in trouble, I made a rough estimation, but then again, how about the places I've bought from that ALREADY incorporated sales tax? I don't remember which they are, I don't keep records that closely on that stuff. Let's hope little graduate student me doesn't attract attention and get audited on my cute little minimum wage income. Because that would sickening if citizens are getting in trouble for this, while 60% of corporations didn't submit taxes 1996-2000 (was in the news this week). *sigh*
I make several thousand dollars in on-line purchases of bike and computer parts each year. I won't ever report them.
After much soul-searching, and looking around at all the manifold books, dvds, etc. I've bought online, I finally decided to compromise and provide an amount on the largest(size) item i could see that I'd bought online - a home theater system from an NY retailer - this cost $400 and at 5.6%, that works out to approx $20.
Well, I've sent it off, and feel somewhat easier, but as confused as anyone about why one state should care about goods purchased from another state if the retailer is not registered in the second state.
Of course, with the strength and ease of data-mining, this may be very easy for revenue agencies to collate and use in an audit. In which case, I might be better off:)
Anyway, my question is simple - there's this line on my state taxes that asks me how much I paid in out-of-state goods over the past year so I can fork over sales tax on the items. My answer: I have no idea. Am I supposed to?
I was rather surprised to see this on my tax forms, since I don't recall being told any time that I should be saving receipts from out-of-state purchase. And while someone probably could look up my out-of-state purchases on my credit card, I don't have instant access to those records... Even if I did, I don't know what counts and what wouldn't. For example, some things aren't taxed in Massachusetts, like clothing.
I can't see how this will possibly work. I have no way of looking up this data - is it really my responsibility to keep track of my out-of-state purchases so the state can get their $5 or whatever? I don't make many purchases out of state anyway, and I definately don't bother keeping track of which purchases were made out of state and which were not.
You are in a maze of twisty little relative jumps, all alike.
I'm already a 40% partner with Uncle Sam. Every 2 weeks he takes a chunk out of my salary ... indicating that he's putting some of it into healthcare for the old, healthcare for the poor, social security (though the news tells me there won't be anything there when I get older) and a few other government programs. Let's assume I'm okay with all of that.
... and I'm spending money that's already been taxed. What's Uncle Sam want to do? He wants MORE of my money. Where I live ... it's 8.25%. Why do I get taxed multiple times on the same money?
... but this is just bullshit.
Now, I go to buy something
I know if I were making the rules, I'd probably make them in my favor as well
Will someone please explain how NO LESS THAN NINETEEN STATES are doing something so obviously unconstitutional and no one is calling them on it ?????????
Michigan has had the "use tax" for a long time. It mainly applied to mail order, but the Internet is a natural extension of it. It only applies to out-of-state purchases you make in-state (i.e. mail order/catalog order/internet order). I'm not sure how it can be enforced, unless the state is furnished with a copy of every transaction you ever make. I think that requires help from the Feds, since the transactions are interstate commerce. I guess it's also a general rule that any company that has any kind of presence in your state (not necessarily even the place where the product is) must collect your state's sales tax from you, even over the Internet.
In the USA, we like stuff watered down, like beer, television, and freedom.
I don't know about the US. But the EU has VAT on internet purchases, and people in the rest of the world are required to comply with it, on pain of a yet to be decided penalty.
Some of the big companies such as AOL are complying with it, but I doubt you are going to get many porn sites worrying about it.
A US version of the EU's E-commerce VAT directive would probably work for interstate trade in the US, and the EU would probably be receptive to some sort agreement to enforce Sales Tax within the EU in return for the US agreeing to enforce VAT in the US.
Returning to your point, I guess all your internet purchases will be recorded on your credit card statements. Your tax authorities may well ask to see them.
since I run an on-line business in AZ, telling me to report any internet purchases I had made. I thought about it for a minute and then realized of the two known internet purchases one had been refunded entirely by the company (NewEgg, which resulted in me getting a server case for free after they jerked me around for several months) and the other was less than $100 and had just taken place a couple days prior. It's actually pretty rare that I buy things on-line and I don't keep records unless it's a purchase for the business since it's a tax write-off. The only purchase I could report was a business expense.
The tax only applies if you purchase tangible goods and import them into your state of residence. It falls under a "Use Tax."
If you're not running a business you most likely will not be bothered. I was probably sent a letter not only because I run a business but also because I don't pay any taxes on sales since they're all internet based and out of state. Every month I have sales to report but no tax. It also may have raised a flag.
Ben
Work Safe Porn
In the short-run, as the article says, there's essentially zero compliance for existing law, and the only way anyone is getting into trouble is if the state is out to get them for something else. In the long run, Liselle is entirely correct. This burden is going to be imposed on Internet vendors, the way investment firms and banks are required to do the revenuers' work for them.
What I'm listening to now on Pandora...
Yeah, sure. This has about as much chance of actually being enforced as collecting sales taxes on yard sales.
Imagine that: police officers arrest a mom and her kids because they didn't pay the "sales tax" on a yard sale where they made maybe $60.
If they do try to enforce this, state governments will have a PR nightmare. Not to mention a lot of court challenges...
Article I, Section 8 of the US Constitution:
The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.
Amendment 16 of the US Constitution:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
Sorry, but I find it hard to argue with that...
Illinois has a use tax. It has for many years. Of course, don't take tax advice from /., see a real CPA!
Viv
Gmail invites for ip
Two words: Al Capone
C|N>K
IRS is Federal. Why do they care about state sales tax? Did your cousin tried to deduct it on his Federal tax return?
In the USA, we like stuff watered down, like beer, television, and freedom.
And as to the question of how they can find out: states do occasionally audit mail order and internet retailers who don't charge sales tax in their states, looking for large purchases that didn't get charges any tax. This is why businesses typically pay all their use tax, because they usually make much bigger orders and are easier targets. It is possible for them to find your tax-free purchase, then check to make sure it was declared. But it's not very likely, and probably reserved for large purchases.
In any case, I'd only worry about large purchases. Those small E-bay purchases are probably safe. Oh, and this technically applies to purchases you make in sales-tax free states which you take home, also. So remember kids, whenever you go to a state with less sales tax than yours, pay everything in cash!
Welcome to the regulated free market. Thanks for playing.
Photos.
States have no right to tax interstate commerce, buying something out of state is interstate commerce and constitution clearly states that states have no right to levy tariffs or taxes on interstate commerce.
Have you ever been to a turkish prison?
Are You Reporting Your Internet Purchases?
Hmm.... I'm Amish you insensitive clod???
damn, something seems about that statement.
-B
Wishful thinking Arnold, but I think you're going to need to squeeze a few more drops out of something else to fix the budget. I swear I paid sales tax for every damn thing I ever bought online when I lived in California...because every online company was based in California and the website charged the tax to begin with. What is the rule on that anyway? Is it where the coorporate headquarters are will you get charged just because they ship it from a warehouse in your home state?
The thing I find annoying is that I have to do all the legwork and keep records. If the gov't has the ability to find out what I bought, why not just send me a bill? Or have the online retailer charge the tax.
I'm glad I live in Oregon where we don't have to put up with that sales tax nonsense.
It is really nice knowing how much something will cost just from looking at the price tag. When I go to other states it is really weird.
Technically speaking, when I visit other states I shouldn't have to pay sales tax. Washington is the only state that has people that understand that. I can show them my drivers license and they take it off my bill. If I try to do that in any other state, including neighboring California, they will look at me like I'm insane.
As if the idea of not having a sales tax is insane. Sales Tax is what's really insane. It is a pain for the consume, it is a pain for the business, and you don't get to write it off your federal income taxes like you can with State income and property taxes.
There are even some politicians that want all internet companies to automatically collect income taxes and give them to the state of each consumer. It would be a big expense just figuring out the logistics, collecting and distributing taxes for the 48 states that have sales tax. Mail-order businesses have never been expeted to do this so why should internet companies?
Well, this article isn't about that, it is about people voluntarily submitting their out of state purchases for sales tax, which technically speaking, you have always supposed to do whether traveling or buying mail order. But most people just pay the local sales tax when traveling, and don't think about it because they don't come from a state without sales tax.
I hate Liberals and Conservatives.
If you are a Liberal or a Conservative, then HAVE A NICE DAY!
Courage.
Do any Canadian provinces require this yet? I'm 19 and have never filed taxes in my life.
Liberty you never use is liberty you lose.
For example in Ohio...
When the retailer charges you sales tax on your purchase, you do not have to pay additional use tax to Ohio.
The last time I checked, my state government had the power to tax my instate commerce, while the federal government had the power to tax my interstate commerce. When did this change?
I did a paper in high school on a nationwide sales-tax, which I was all gung ho about. Seven years later I realized that it was unconstitutional for the U.S. government to tax intrastate commerce, and changed my mind.
Personally, I'd like to see them constitutionally prohibited from reaching into my wallet, period.
Secession is the right of all sentient beings.
Our property tax is not any higher than MA. We do have one 8.5% "sales" tax on hotels, meals and rental cars (I'm not positive about the last one). The primary reason our taxes are so low is we have a small population that does not require the same level of services as more populous states. It really surprised me that no one call Howard Dean on his claim that he provided health care from VT residents so he could do it for the US. Comparing a small rural state with low unemployment and no big city poverty with the US on the whole doesn't hold up.
Ha! Oregon has no sales tax.
The Spoon
Updated 6/28/2011
All you had to do is ask =)
The Massachusetts Revenue Department says it plans to start suing Internet cigarette retailers in a bid to track down customers in the state who are not paying the $1.51-a-pack state excise tax.
And lest you count on your dealer standing up for its and its customers' privacy, don't forget there's another party usually involved when you buy through the internet...the shipper.
United Parcel Service, apparently breaking an earlier pledge, appears to have turned over to the Massachusetts Department of Revenue the names and addresses of Bay State customers to whom it has delivered cigarettes from out-of-state vendors. The Revenue Department, which obtained the information by using an administrative summons, is sending letters to the customers demanding they remit unpaid cigarette excise taxes plus interest and penalties. The agency also threatened civil fines and imprisonment if the taxes are not paid within 30 days.
Of course...how do they know what's in the box? Some low-tax state smoke dealer could be sending me used t.p. for all UPS knows. But in just in case, I get my fix shipped USPS, which so far has refused (at least publically) to hand over such information.
Lots of nagging consciences will be asking that over the next week, as taxpayers confront new sections on state returns that ask them to fork over unpaid sales taxes for items purchased out of state, including online transactions.
So basically, you have to pay taxes twice for products you buy outside state lines?
hey, try california here where the sales tax is 8.25% and they're talking about 9% :( My household pays ~40% income tax as well... it's quite a burdern.
Religion is a gateway psychosis. -- Dave Foley
Moderating him down is not proving him wrong.
Assuming you pay for them all by credit card, all you need is your credit card statements for 2003. I have 12 of those, so it probably takes me half an hour at most to go through them all.
(I do pay this every year--Michigan seems to have had this for a while. Taxes support some things I don't like, but they also support a bunch of things (like schools) that I think are more important than practically anything else I could spend money on, and more generally I believe in the idea that we should all chip in for things we decide need money, so I don't get so upset about paying taxes. I *do* curse a lot at having to the forms, but the use tax is one of the simpler things to figure out.)
--Bruce Fields
For the typical consumer this is a non-issue. The government is not going to go to extraordinary lengths to figure of if I owe tax on the $50 worth of Amazon stuff I bought. It just isn't economically worth it. Now if they had all financial information in the country in one place, they could theoretically figure this out (although given the government's record of technology use this is extremely unlikely), but that would raise significant privacy concerns.
So who should worry? Well, if you are trying to buy expensive art (or any other pricey item) and trying to avoid the tax, then you are a target. If you figure that the cost of tracking down a non-payment is fixed, then you have to assume they will focus on big ticket items.
What the states are doing in this article is pretty reasonable if you think about it. They throw one line on a form and hope people will send them money. This is money they wouldn't otherwise have gotten and it cost them nothing. They won't get much but, hey, it's free money so why not.
Hey, this is state collection, not US IRS collection. It takes a very severe case of paranoia to think that the FBI would share data with the California Franchise Tax Board...
Dr. Rick
- "It's such a fine line between clever and stupid" (Nigel Tufnel)
- Zort! (Pinky)
That's it, I can't take it anymore... I'm moving to amsterdam!
It's pretty common along the Washington(8+% sales tax) Oregon (no sales tax) border too. Incidentally if you live in a state that doesn't have a sales tax you are exempt from other state's sales taxes (probably true about all states, but they might come after you for the use tax if you live in a state with a salels tax). You were supposed to report the items purchased and pay the sales tax on them (mail order too). Companies are only required to collect if they have a physical presense in the state.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
The last couple of years, I did go through my old internet sales receipts and pay the tax on it. Although I *know* I overlooked some purchass
This year, my state gave me an option -- either pay an itemized use tax or an assumed use tax baed on your salary. If you pay the assumed use tax, you wouldn't be audited/fined unless you purchased items costing > $1000.
I assumed the actual use tax would be lower if I itemized. So I went through my credit card bills and discovered it would be *far* cheaper to pay the assumed amount than the actual amount.
I think it was about $20. I had about $1000 total of internet purchases (that would have been taxed at 6%).
No.
-Ted
-=-=- Quantum physics - the dreams stuff are made of.
- Alabama,
California,
Connecticut,
Idaho,
Indiana,
Kentucky,
Louisiana,
Maine,
Massachusetts,
Michigan,
New Jersey,
New York,
North Carolina,
Ohio,
Oklahoma,
Rhode Island,
South Carolina,
Utah,
Vermont,
Virginia,
Wisconsin
However, even though all these states have places to report this tax, in almost every case my firm just puts in a zero. Granted this policy may change if states become more active with enforcement, but that is our current policy. Just don't blame me if you put 0 and get audited.On the issue of vehicle registration: California charges you a hefty registration "transfer fee" on a vehicle purchased out of state, approximately equal to what the sales tax would have been if you purchased it in CA. This is aside from the low emissions requirement (which I do approve of), and amounts to another use tax. What is disturbing is, there's no exception on the topical use tax for vehicles.
Incidentally, I've made several internet purchases which were gifts for people in Hawai'i, where shipping is a problem, and had them shipped to me in California, then reshipped (or personally delivered) to Hawai'i. Do they expect me to report those as well? They must be nuts!!!
-- Still waiting for the Nike endorsement
This is actually illegal, and the IRS has this information. And who knows, maybe the government owes *you* money.
You have to pay taxes. If you don't fill out your paper work they will give you a fine and you have to pay interest on it.
This is also tax evasion, which I believe is a federal offence. You know, this is the only way they took down mobster.
It's tough to say how much you are supposed to pay, even if you *had* kept track of your Internet purchases.
I moved from a Maryland to Michigan in December 2003. If I were to count all of my Internet purchases for 2003 on my MI taxes (which requires the use tax) then, I would be paying for mostly MD purchases (which, to my knowledge, does not). So, just divide it up before and after, right?
Not that simple. Around the time I was moving, I was purchasing a lot of last minute things on the Internet. Many of which, I ordered in MD, but received in MI. Or, the transaction was initiated in MD, but by the time the money was transferred, I had already moved.
Don't taxes frustrate people enough without introducing state taxes like this?
So moving on...
Looking at just my little slice of the country there are three counties within easy driving distance, and all three have a different sales tax rate. They range from 8.25%-8.75% (welcome to CA).
So let's say I now run a business selling widgets, and I am expected to keep a list of all the counties in the US and their tax code, figure out what my customer owes on purchasing 4 widgets, and mail this payment off to the state in question so they can disburse the proper percentage to the county from which my customer bought it.
Right, good luck.
Some scrupulous tax accountant out there may do this on their own purchases...but some how I doubt it. And they better figure out a way for the business' trying to collect this tax to have an easy way to pay out properly...or it will be doomed to failure, if only because it will end up being to costly to enforce.
If you are one in a million, then there are six thousand people who are just like you.
http://money.cnn.com/2004/04/06/news/economy/taxes _corporate.dj/?cnn=yes
Funny, the site doesn't load in mozilla, only internet explorer.
espo
Since this is state tax we're talking about, why would the IRS nail them?
How come Slashdot never gets Slashdotted?
I think that the parent refers to some shenanigans that took place in passing the 16th amendment - that it may not have been legally ratified.
That is really just an academic question though - you've got to play the cards your dealt, and we've got to deal with the federal income tax system, as much as it sucks.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
Florida also has a use tax and used to run extremely obnoxious commercials telling people that they were required to pay it if they purchased items outside the state.
I would think that a "use tax" that is applied only to people who make purchases outside the state would be attackable as an unconstitutional attempt to regulate interstate trade. You're applying a special piece of state income tax code to a class of people that isn't everyone. Since that class of people is only people who have made out of state purcahses, how can it not be an attempt to regulate interstate trade. It will certainly have that effect.
I would think that a far more legally solid method of applying taxes would be to tax a business in a specific state for any sale it makes, whether the sale was in-state or not. Of course, no mail order shop would ever set up shop in a state that did that...
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Finally, a topic to get a /. account for :)
w ww.americanradioshow.us (archived radio shows about the subject)
I know that if I go to the CA state law and/or their website, they repeatedly state it is VOLUNTARY to report your purchases on the state income tax forms. They also want you to enter their VOLUNTARY program to make paying your use tax easier.
As other posters have pointed out, this CLEARLY violates the Consitution's limitation that only CONGRESS can regulate interstate commerce, and NOT the states themselves. Paying a tax on stuff you acquired from outside the state (over the internet, the purchase takes place in the state where the item is located at the time of purchase) is CLEARLY regulating it. We threw out the Articles of Confederation for our current Constitution because states were introducing their own tarrifs(sp?) on things from other states.
Another thing: Resellers of merchandise charge sales tax because they must or lose their business license. Last time I checked, I didn't acquire a license from the State of CA to purchase merchandise nor did the business in New Jersey acquire their license from the State of CA to sell the merchandise. Clearly a lack of jurisdiction here, unless I VOLUNTEER to be under their jurisdiction.
Just like the income tax, what you say you owe under penalty of perjury makes you LIABLE for the tax.
Again, just put a big fat -0- in that space.
Perhaps you should also check out the fact that most Americans working in this country are NOT liable for an income tax either. Some great sites are:
www.paynoincometax.com
www.givemeliberty.org
Time for people to learn the truth about this fraud.
Are you sure it was for lack of paying sales tax? The IRS should have nothing to do with this. It will only be on state tax returns.
Your credit card statements wouldn't be enough. For example, IIRC
shipping charges are exempt (at least in some places). Also, some
on-line retailers already charge the appropriate sales tax (companies
that already have a presence in your state are supposed to track and
charge sales tax, and I know at least some do).
If the bus system isn't self sustaining then that is the bussing companie's fault. You shouldn't have to fork over dollars for pork that can’t sustain itself. Greyhound has been around for decades and they know how to make money.
Sales tax and property tax are the ones that have the most "positive" local impact - much of that money stays at least in your own county instead of being sent to Des Moines or Washington.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
Some online vendors charge local sales tax even if you are out of state. I believe that Apple is one such. Does this mean that I'm supposed to pay local AND remote sales tax?
plus-good, double-plus-good
IANAL, and apparently neither are many of you, because three minutes of Googling turns up Henneford v Silas Mason Co., 300 US 577 (1937).
Of course, I'm not paid the big bucks to read boring legal cases from 1937, so I'm going to have this page from the Minnesota House offices interpret this for me. I'm told that, in this case, the Supreme Court specifically decided that the use tax did not violate the Commerce Clause.... basically because it's fair to expect local and mail-order businesses to compete on the same playing field.
So. Better hire a lawyer before failing to fill out that Use Tax line on the grounds that "this 'new' tax is unconstitutional"...
-If- there is going to be a tax on interstate sales, the tax should go to the state where the product is sold, not the state that the product is shipped to.
Fucking whiner.
BTW, your site's crap. Warning to anyone who considers visiting it, it's not worth it. Waste of time.
Umm check the constitution. They have an amendment giving the right of the government to tax the shit out of you.
Newsflash 1: Walmart was closing down entire small towns LONG before online shopping was a reality. Heck, it'd killed out most of my hometown (Miles City, MT) by the time I had 2 friends with access to 'this new Internet thing.' They come in, they waaaaaay undercut until all local competition is dead, then they raise their prices back up; being a national chain with a huge bank account and one of the world's best cost structures will do that.
Newsflash 2: I'm an apartment dweller, but neither fat nor pasty. You're right about my not caring about the STORES around me... Between box stores and the Internet, I can get basic necessities a lot more conveniently than I could before. I do care about the beautiful mountains around me though (Missoula, MT... great place!)
The interesting, unique stores with something to offer are thriving. Places that offer only Yet More High School Clerks and commodity goods are dying unless they happen to be WalMart, the grocery store, or the WalMart with a grocery store. And you know what? I've gotta say, my life is BETTER for it.
When they strip IE from my copy of MS Windows!
(OK, not a perfect fit, do me one better.)
FFS, would you spelling and grammer nazi's shut the fuck up. People will always mis-spell things and write with bad grammer. I hope to HIGH FUCKING HELL that I have in this post. Gawd shut up and quit posting until you have something positive (as in factually relevant to the topic) to say.
I do give a damn. I gladly pay more in a store that has well paid, intelligent, and honest salespeople. As it is, usually I hate the shopping experience in many (but not all stores). You are lied to, or you cannot get served, or you can't find what you want, or things are stocked so that everyone trips over each other and the merch.
But there are stores that manage to keep me coming back and spending more. How? These stores are pleasant, well organized and well stocked, and the sales help and cashiers are helpful and fast. If you can't pull all this off, then don't be surprised that us "cheapskates" don't seen any reason to pay more at your store.
The tax issue is only one of a zillion factors why many of us have moved a lot of our purchasing online.
What exactly is a "Use" tax... let's say I bought the latest season of "Simpsons" on amazon and had it shipped to California, then, without unwrapping it, I shipped it to my brother in New York as a gift for his birthday. Will I have to pay "use" tax on this or will he have to pay "use" tax on this even though I am NOT using the product (it's not even in my posession) and he didn't purchase it?
Just start a corporation and never pay tax again.
Tax paid comes back into society through schools, hospitals, roads, police, etc. Sharing your your wealth a bit can only make society better.
Oh, well...
Don't let the door hit you in the ass on the way to the unemployment line.
They can't possibly enforce it, and you aren't prepared to provide an accurate number, so ignore it.
If they want to create a significant revenue stream based on use tax, they're going to need to educate the population.
We're already taxed more than once on the same dollar. I'll sit this one out.
This is my sig. There are many like it, but this one is mine.
IRS is Federal. Why do they care about state sales tax? Did your cousin tried to deduct it on his Federal tax return?
If it's business related it will show up in the Federal return - especially if it's an equipment purchase with depreciation. I'm actually not sure what led to my cousin running afoul with this or if it was a Fed or State audit. I just know they had to pay a lot of money.
If you're paying the 38% tax rate, that means you're in the highest income bracket. That means you can afford it a hell of a lot better than someone in the lowest income bracket. If you REALLY want a burden, try supporting a family of 4 or 5 on an income of $25 a year.
jX [ Make everything as simple as possible, but no simpler. - Einstein ]
"Tax free" interent purchases are on their way out.
it's the truth!
If it was interstate trade within the EU, it would be Alabama.
If it was international trade involving the EU, it would be Texas. However, they could by concession, use the billing address of your credit card as the place of supply, so it would be presumably Colorado.
I don't know how it is going to work in the US.
So if I eat dinner in a restaurant across the state line in a state that doesn't collect sales tax, and drive home, do I owe on the partially digested remains in my stomach? If so, how do I calculate the amount owed since evidently at least part of the food was used out of state?
The question is, when you buy a good online and have it shipped to you, where is the point of sale?
I live in Wisconsin, which has a use tax. I'm supposed to pay that tax on anything I consume within the state of WI which I have not paid sales tax on, except that I get a credit for any sales tax paid to another state. For a more specific example, my GF lives in MN, which does not tax clothing - I am supposed to pay WI use tax on purchases made by me while I am in MN which I then import into WI. This is clearly unconstitutional, as the point of sale was clearly in MN and the only thing that makes the good consumed in WI is the fact that I transported it there.
However, if I order something online and have it shipped to me by someone else, where is the point of sale? Is it in the state where the business is located, where the product is wharehoused, or the state you live in?
If I go into a brick and mortar store and purchase something that they don't have in stock which is then shipped in from out of state, I clearly must pay sales tax on it. If I'm a business and I order product from out of state that I consume within my business and do not sell, I have to pay sales tax on it. If I'm a consumer and I use my computer to order something from out of state instead of my local store (i.e. I replace the local store with the computer), does that remove my obligation to pay sales tax?
What we (consumers) probably want is for the Supreme Court to say that sales tax is applied based on the state where the product is sold FROM. States will not collect these taxes, as if they do, businesses will simply relocate to states like NV or NH that don't have sales tax.
The reality, however, is that your state is going to get its money, one way or another. If they're not getting it from sales tax, they'll just increase your property or income tax. That's probably what they should do anyway - instead of trying to have a tax they can't reasonably enforce, they should just switch to a tax they can.
paintball
Have you seen this list of how tax-friendly each state is according to the Tax Foundation? See
http://money.cnn.com/pf/features/lists/taxesbystat e2004/
New Hampshire's burden is quite low, but don't think you're not paying for services in some way. Surprisingly, ``Tax''achuseets has a below-average tax burden.
Well, in the EU, largish companies (such as Amazon) have to add the VAT (sales tax) of the customer's country of residence. Small companies add the VAT of their own country of residence instead. It's a good example of an area where the EU is more tightly integrated than the US.
Another interesting difference between VAT in the EU and sales tax in the US is that in the former, the VAT is included in the prices you see in shops. I've never really understood why Americans prefer to do all that mental arithmetic ...
see http://www.irs.gov/ind_info/friv_tax.pdf
once they bend the words like this there its sorta-kindof hopeless, no?
I reported it as much as any politician or corporate executive reports every dime appropriately and is incredibly honest and straightforward about THEIR taxes.
Actually, I live in Oregon, so the $20,000 and change that I've spent online in the last 12 months isn't taxed. Period.
I live in Texas, you insensitive clod!
Oh, wait... no state income tax is a *good* thing.
Nevermind.
I am NOT a man!
I am a free number!
espo
"Burden" seems like a bit too light of a word for getting $25 to support 5 people for a year in California.
Yeah, fair enough. If I was really organized I'd calculate the tax in advance when I entered the transaction into GnuCash, which would make figuring stuff out at the end of the year trivial. As it is I think I get close enough not to care. (Tax on shipping isn't going to add up to much, and it seems few if any of the vendors I order from collect sales tax themselves.)
--Bruce Fields
(nt)
Just now I am looking at some junk mail (snailmail) for a magazine. It says in the **fine print ...
:) , what can the govt say? These are outside state sales, plus, I am fairly sure that an on-line purchase of these mags would say the exact same thing. So, what gives?!
.... how about an across the states tax law (I know ... flamebait!). It just appears that it would be easier that everyone is taxes the same. Some say that taxes suck, but you know that you need them if you like to have streets paved, schools to educate your children, disaster recovery surplus for when a tornado destroys your town .... etc. Also, appears that there is no good answer for all of the tax issues, but the one in place right now does not work as well as it should. imho.
Canadian residents add 15% HST or 7% GST to toal. AL, AZ, CO, DC, NM, and WV add sales tax to all peridicals. GA, IN, KY, MD, MO, and OH add sales tax to print and combo periodicals. NY add sales tax to electronic periodicals. European Union residents add VAT tax to electronic periodicals.
Now, if your state is not listed and I believe magazines are fairly regulated (I know that someone will prove me wrong
It looks like someone needs to be slapped with a wet macrol (fish) upside the head for the tax laws
People in Northen California (sales tax 7.25% and up) have for years driven to Oregon (sales tax 0.0%) to make large purchases. Naturally, we all voluntarily include the sales tax on our state income tax forms, so it'll be easy to just add in for internet purchases.
Some mornings it's hardly worth chewing through the restraints to get out of bed.
Problems...
Even with credit card purchsaes, there's no way to tell WHAT you purchased. What if it's food? Not always taxable. What if it's for a service that was already taxed?
Use tax has no way to be monitored, and there's no way for them to compel the receipts for the purchases. After all, the tax men are asking you to pay for extra taxes, not you asking to get deductions from them.
Human nature is the same everywhere; the modes only are different. -- Earl of Chesterfield
Though given that the places I've lived have been at the high end of the income scale, I'm not sure they really need my taxes as much either.
Having counties and states that consistently fail to, say, fund decent public schools, *does* end up hurting us all in the long run.
--Bruce Fields
... The gentleman you're referring to is Joe Bannister, who prior to 1999, was an IRS special agent for their CID (Criminal Investigation Division).. Being Mr Bannister apparently took seriously the oath he swore when he joined the IRS, to uphold the constitution, he found he could not continue to work for an agency that violated the constitution as blatantly as the IRS does. Now before you place a tin-foil hat on him and me for posting this, I suggest those of you who think that the "income tax" is a pain, but is correctly administered under the Constitution, that you educate yourself by checking out the website above that the parent posted.. You may be seriously pissed about what your government is doing.. or maybe, more likely, being this is slashdot, you'll put your heads back in the sand....
AC and proud of it..
"It's such a fine line between clever and stupid"
That would be a quote from Nigel Tufnel.
even better, I live in both Indiana and Illinois (I'm a student @ Purdue)
so how do you define "out-of-state" do I have to pay 2x? hahahaha that would be wrong.
Since VAT is collected at every stage of the manufacturing process of a product (every time "value" is added to it), it is frequently used to conceal the actual amount of sales-like tax ultimately being paid by the end user.
Then again, all the taxes paid by business now are already a hidden tax for the end-user as he must ultimately pay a portion of the company's taxes anyway as part of the product's price. Insistuting a VAT, though, wouldn't change that but add to it.
The "honor system" doesn't apply here, because no one has agreed to pay sales tax on out of state purchases. If we had agreed as a nation or as individual states to report our online purchases, we would be on the honor system.
If we refuse to comply with unreasonable demands for money from the state, we are not on the "honor system" as far as our obligations are concerned.
-JemHell no!
iF yOu WAnT to C YOUr iP agaIn gAThEr tWO MilLIon dOLLArS IN Non - cONsEcuTivE TweNtY's AnD AWaiT FuRThER iNstrUctIoN
If they want to tax Internet purchases, they need to make a separate law for it where the purchaser pays taxes to the state that the bill is sent to. So if I buy a 2000 dollar Dell computer and I live in Louisiana, Dell has to add 200 dollars in sales tax and send it to the LA gov for us. If they can't do that, then hell. I don't remember my Internet purchases. Perhaps an easier thing to do would be to simply abolish all sales taxes (stupid things anyway) and increase property taxes to make up for it. Of cousre, this is a little biased towards richer people who own property (then again, apartment complexes will just raise rent when they have to start paying higher property taxes).
When I lived in NY (another use tax state) I knew this guy who moved across the border to Pennsylvania and bragged about the low taxes. Until he had to register his car. He had to go a gas station down the road, there's this old timer who tells him to come back Thursday. That's when his wife will be there and *she* does the paperwork.
Then on this year's form I saw the Dreaded Line. I thought about it for a long time. I have always carefully avoided Web sites that charge taxes. But in the end I just paid the tax, for a combination of reasons:
Shamefully, I did contemplate lying. But how? I mean, it's nuts to write in "zero". When your auditor asks "why zero - haven't you ever bought anything from Amazon?" what am I gonna say? "No, I live in a cave and all my books are handwritten on vellum?"
I could claim that I didn't know what I had spent. Unfortunately, I save my credit card bills, since I want to have some evidence on my side after my identity gets stolen. Even more unfortunately, I own Quicken, which can print out all my interstate transactions for the year in, like, three minutes. Oops. So not only is ignorance not a legal defense, it isn't even a believeable defense.
I thought about only paying the tax on the big-ticket items. But the difference between that and just paying everything I knew about was, say, $15. It's worth $15 to be able to go before my auditors and NOT lie.
And there are karmic benefits. I no longer refuse to walk into my local stores because I know I can pay lower taxes on the Internet, even after shipping. Instead I refuse to walk into my local stores because they charge $25 for a book that Amazon is selling for $18. I mean, I know I am supposed to support my local stores, but $7 per book?
"That is really just an academic question though - you've got to play the cards your dealt, and we've got to deal with the federal income tax system, as much as it sucks."
This would be true if we lived in a totalitarian regime. We, however, live in a representative republic governed by principles, the Constitution, and the rule of law. Thus, one is quite welcome to challenge or attempt to change laws with which they disagree. This can be accomplished via court action, congressional lobbying, or state-initiated Constitutional Amendment. To challenge the income tax via the courts is perhaps the most interesting of the three. To do so successfully, one would have to convincingly argue to the Supreme Court that it effectively has the power to nullify Constitutional Amendments which are intrinsically counter to the fundamental principles contained within the Constitution proper.
An extreme example of this would be the unlikely situation in which a Constitutional Amendment were passed declaring women to be the property of their husband or, lacking one, their father. Thus, any and all rights normally given to a human being would be usurped by the will of their 'owner'. The question becomes, could the Supreme Court declare that such an amendment runs so contrary to the principles of the Constitution that the amendment, itself, is unconstitutional? As much as one would like to say that it can, you then call into question whether there is any check on the power of the Supreme Court, but I digress.
One would also have to convince the SCOTUS that a blanket income tax is effectively a head tax. One cannot survive without income; thus, one's very existence is taxable (head tax). The latter argument is far easier than the former, primarily because it doesn't create a constitutional crisis, relating to the seperation and balance of powers.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
Not such a bad system, honestly, but I don't think your assessment is fair since New Hampshire has no real urban areas or blight to deal with and just doesn't need a lot of the infrastructure that a "real" state (one with a more substantive population) requires.
You know...one really has to wonder.
The idea of urban areas is that they're more efficient. You can centralize and reduce transportation costs. New Hampshire lacks those, so presumably is under even tougher constraints.
Yet New Hampshire manages to do just fine with*out* urban areas, without a sales tax, and without an income tax.
What are they doing right?
May we never see th
Regardless of the legality, taxes are punishments. Sales tax is probably the worst punishment of all since it makes everything you purchase cost more, but does not increase the value of the item purchased.
People, obviously, do not like to be punished - especially when they do not feel like they are doing something wrong. So people are going to avoid punishments (i.e. taxes) whenever possible.
A lot of these people base their argument on how you define "income". They claim that working for money is defined as "compensation" under the law, and things like dividends/savings interest or profit from a business are income. By that definition, most individuals do not make as much "income" as the government says they do.
They make some legal arguments that are pretty convincing if you haven't fully researched their claims. I never have, so I cannot say if it has any legitimacy.
Why on earth do we have sales tax anyway? Either tax it when I get it (income tax) or tax it when I spend it (sales tax), but why the hell do they get to tax every friggin dollar I get *twice*???
Yeah the government needs money. Yeah it needs a lot, but sheesh. *Alsmost* pisses me off as much as social security...but not quite.
How many pennies is that a day? In any case, living in California is a choice and having 3 or 4 kids is also a choice. You'll probably disagree with me, but that's ok I'm used to it.
Um. HELL NO
Are you a government agent?
I hate sigs.
In case you aren't familiar with this tax-evasion technique, a corporation sets up a shell subsidiary (in name, an independent entity) is some place like the bahamas. The third part of the triangle is in the country that supplies the raw materials. Say I'm making shoes, and sell them for $100 a pair. Ordinarily that would mean a lot of profit for me, so to lower my apparent profit, I buy the raw materials for $90 from myself (the bahamas subsidiary). The bahamas subsidiary, however, bought the raw materials for $9, not $90, from somewhere in argentina. The US-registered corporation in fact makes a profit of $91 per pair of shoes (less labor and other expenses), but appears to have only made $10 profit per pair. The actual income is in the bahama shell, which has no obligation to pay US taxes.
How does this tie into income taxes? Well, ordinary people don't pay income taxes; they pay wage taxes, which are not the same. If I am allowed to deduct the cost of groceries, rent, gas, tuition, and healthcare, then I'll glad pay 30% tax on whatever's leftover.
Si la vida me da palo, yo la voy a soportar Si la vida me da palo, yo la voy a espabilar
Come on, yourself. The states have long wanted to force businesses (including out-of-state businesses) to collect sales taxes on all purchases.
The Supreme Court hasn't fallen for that. They will only allow a state to force a business to collect sales tax if the business has a physical presence in the state trying to collect the tax.
Whether the transaction is in-state or interstate seems to matter to the Supremes.
I'm a fan of judicial activism where it makes sense, but it would be crazy -- and completely out of character -- for the SC to directly contradict a Constitutional amendment. If the SC ever just decided to nullify an amendment in such a way, we would basically have to abolish or drastically limit the court's power.
The head tax idea is interesting but extremely unlikely. People who want to get rid of the income tax are probably best reccomended to just convince the feds to stop using it. After all, Amendment XVI doesn't say the Congress *has* to tax income, just that it may do so. Obviously this is pretty unlikely, but far more realistic than getting the Court to do it at this point in time.
In a perfect world, taxes would be turned on their heads. Right now, the bulk of taxes paid are sent to Washington and the various state capitals, with the localities left with the crumbs.
How many people would complain as much if the bulk of their taxes stayed local? If that were the case, the overall tax load would also be much lower because it's much easier to affect your city councilman or county supervisor than it is your congressional representative.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
I can't see how this will possibly work. I have no way of looking up this data - is it really my responsibility to keep track of my out-of-state purchases so the state can get their $5 or whatever?
Yup. You are absolutely responsible for keeping track of these expenses. Ask any store front, and they have to keep track of the same thing. Many conveniently tack on the States percentage to your transaction, but even those that don't explicitly do it are still obligated to pay it.
State audits are terrible.
However, despite the common "ignorance of the law is no excuse", we'll give you a pass for this year.
But, now you know. So, no excuses next year. Save those receipts.
If they were to stop using it without making it unconstitutional, it would eventually come back.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
Some parts of Chicago is now 10 or 11% I think. I took a ski vacation in Michigan and the stinking room tax is 14%. Jesus, Keweenaw County is such a fucking dump.
Don't ever openly defy a tax authority, they're always looking to make an example. Play an earnest sort of dumb.
If the government made an amendment to come to your house and rape your wife, would you accept that too? I'm sure many would.
Taxation is okay because we tolerate it. Taxes aren't so high that the average joe is upset enough to put a bullet in the nearest politician. By that measure, we vote for the status quo every day.
I can't believe I'm reading supergeeky Slashdot posters claim they can't pay the tax because they have no record of out-of-state purchases.
Unlike many Slashdot readers, I can't compile a single executable to save my life, but I am easily able to have my accounting program sort transactions by company, so I can cross out everything from in-state companies. That leaves me with a list of out-of-state purchases.
Even if you aren't tracking transactions in Quicken, how can it be so hard to obtain this data when it usually it exists in two places: Your credit card statements and the web-based account access features of the stores you shop at. And because it's online, getting it into Excel is more or less a cut and paste operation. Then there's this function called Sum...
Man...am I really having to explain basic data migration principles to Slashdot readers?!?
The feds wanted to get one of the leading players in Indian gambling. The FBI went to the state revenue service for records the guy had to file because he was a casino official. Nailed him good. Would you like to spend 2 years in Allentown when you're in your middle 60s?
Didn't even need a warrant for those records. I assume VISA/MC is pretty easy, too.
Probably so. But even if you made it unconstitutional, there's no reason the Constitution couldn't be changed again. And since neither one is going to happen (because ultimately income taxes are good ideas, even if the current system is poor), it's moot.
I'm sure you're still supposed to pay the use tax even though you're not still in possession. I guess if you want to push the term, you "used" the purchase as a gift.
I believe state borders should be fortified and all persons and vehicles crossing state borders should be searched. All out of state visitors should be photographed and fingerprinted while were at it. Case closed....
Sorry, but the use tax is tremendously stupid. While I refer to states (parent article) but similar tax problems exist in Canada. Different provinces apply different sales taxes. While this thing is calles sales tax (name implies tax applies on SALES, no consumption) it is not applied that way. If I purchase products in one province and take them to another for consumption I need to claim for a refund in the province I purchase the products and submit tax in the province I use the products. This is incredibly stupid, IMHO.
I purchase a lot of products online and over the phone. My choice of supplier rarely takes the location and possible taxes into consideration. I purchase from whomever gives me the best service.
But, now you know. So, no excuses next year. Save those receipts.
Or haul ass to a state with no use tax!
So you're saying my signature rings true? :)
I stand corrected...
Dr. Rick
- "It's such a fine line between clever and stupid" (Nigel Tufnel)
- Zort! (Pinky)
The other half of their argument is that federal law specifies income tax but does not specify that a person is liable for paying that income tax. Even if they are right about that, it would still be illegal to file the federal income tax forms with incorrect information (I, the undersigned, ... under penalty of perjury ...).
P.S. The accountant is probably right. You don't have to pay the taxes (as the state law is unconstitutional (Article 10 I think), but putting a 0 on the line could be seen as perjury. Best to leave it blank.
Or: all your tax are belong to us.
If I understand this correctly, this is how it works. I go to Nevada and buy a TV. I pay Nevada sales tax (which is a lot lower than CA tax) at the time of purchase, and head back to LA.
Now I'm supposed to pay ANOTHER tax to California for...what? The priviledge of USING the item I paid for and have already paid sales tax on?
Sorry, I'm not quite that stupid. But it shows how determined the CA government is to separate us from our money. They tax us to death and then wonder why people move away. Greedy fuckers.
Dell, for example, charges sales tax for stuff sold mail order to NY. Perhaps that is because they have a "presence" here.
We haven't bought much else on line, and most certainly did not keep track of what we bought where and what tax was charged.
I have actually been recommending that most people DO NOT make purchases over the net since identity theft has increased to the point where unless an individual is pretty saavy there is too much chance they will be victimized.
Between online crime and tax proposals like this one I wouldn't be the least surprised if we are seeing the beginning of the end of the "internet retail boom." Unfortunately, this is going to directly increase costs to the consumer, another story of state greed killing the golden goose.
" Article I, Section 8 of the US Constitution:"
If Article I, Section 8 allowed Congress to pass the income tax as it exists today, and create the IRS as it exists today, then please explain the necessity for the 16th Amendment. If Article I, Section 8 authorized the system we have in place, the 16th Amendment would never have been proposed, let alone ratified. Ratification of the 16th Amendment was also conditional on its being a temporary measure, as opposed to a cash cow for a massive Federal Totalitarianocracy.
You're also forgetting Article I, Section 2, which states:
"Representatives and direct taxes shall be apportioned among the several states which may be included within this union, according to their respective numbers..."[Emph Mine]
You're also forgetting Article I, Section 9, which states:
"No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken."[Emph Mine]
The Founding Fathers specifically stated in two seperate places that the Congress may not lay direct tax, except in proportion to the census. They couldn't have been more clear if they'd carved it into Jefferson's skull and stuck his head on a pike in the middle of Philly.
You could always argue that the 16th Amendment repealed these parts of the Constitution, but it does no such thing. Thankfully, the Supreme Court has already taken care of settling any dispute you and I might have about this. They did so in 1916, Brushaber v. Union Pacific R.R. Co., 240 US [1916], in which they held that the 16th Amendment did not alter Article 1, Sections 2 and 9, and that its only result is that the Income Tax remains an indirect tax. (Stanton v. Baltic Mining Co. , 240 US 112 [1916])
"So what?", you're probably saying. "They can still collect an indirect income tax." You're absolutely correct that Congress may impose an indirect income tax. Unfortunately for the IRS and personal income tax fans, the Supreme Court clearly defined an indirect tax in Flint v. Stone Tracy Co. , 200 US 107 [1911], in which it held that:
"Excises are taxes laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations and upon corporate privileges; the requirement to pay such taxes involves the exercise of the privilege and if business is not done in the manner described no tax is payable . . . it is the privilege which is the subject of the tax and not the mere buying, selling or handling of goods."[Emph Mine]
Whoops, there it goes. You may find it hard to argue with that, but the Supreme Court would respectfully disagree. If someone has the money to take such a case all the way to the Supreme Court, we might all get a huge (as in 100%) refund from Uncle Sam in the next few years. The US Federal government was never intended to be the behemoth it currently is. Once we stop sending it all our money, we'll find that many other problems go away as well. It's tough to drop a billion dollars on a police-state inducing program (TIA, CAPPS/II, MATRIX) when your discretionary budget is smaller than a billion dollars.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
Sure I understand that if I go to California and buy something CA is going to charge me sales tax, but if I bring that to Oregon, Oregon is not supposed to tax me for bringing it in the state. Why is it that if I buy something in Oregon and bring it to CA that CA wants me to pay tax on that, and I though there was some free trade / interstate commerce law that forbid that kind of taxation?
Only 'flamers' flame!
Does slashdot hate my posts?
That's how New York works. It's pretty interesting to. If you don't actually look at the instructions they provide you with a handy dandy little chart to compute the tax owed based on your income. This is supposed to cover all purchases less then a thousand dollars. But only at the end do they mention that you can put a zero in this line. I wonder how many people that skim through their taxes just paid it without even looking at what it was? Quite the cash cow for the state.
They do apply it to everything though. Quoted from the instructions for IT-201 (the New York State standard tax return):
So it's not just the Internet they are going after. I don't know what I'm going to do with mine (haven't filed yet). I don't think putting a zero down is a good idea -- it could be considered fraud. That said many tax professionals have told me in the past that they won't audit you unless the amount of cash they can get back is greater then the cost of the audit. It probably wouldn't be worth their time unless you buy tens of thousands of dollars worth of stuff off the 'net or in a catalog.
I'm impressed that it's 18 states doing this. I thought only New York and California pulled this sort of stuff. Guess all the budget crises probably have something to do with it?
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
There are people out there who say that there is no legal requirement to pay income tax to the federal government... How these people propose to fund the building of the roads that they will march on in protest is unclear, but it's an interesting case they put forward from a legal point of view.
The roads are supposed to be funded by the gasoline tax, not the income tax.
Now you might point out that almost none of the money in the highway trust fund goes to pay for highways
and at that point maybe we might agree that since the happenin' people don't give a damn about the letter of the law, why should we?"income taxes are good ideas"
I fail to see how this is the case, unless you're a fan of big government and a socialist state. If you'd like to send all your money to the Federal government in the hopes that it'll provide for your every need, feel free. Personally, I see the Federal government as an out-of-control, digustingly large, billions-bleeding behemoth hell-bent on making itself as powerful and omnipresent as possible. The original intent of the Federal government was to act as a sort of UN for the several states. In cases where states might fight over an issue, the Federal government was given the authority (enumerated powers) to ensure relations between the states remained as civil as possible. Thanks to Lincoln, amoung others, we've obliterated any semblence of states' rights, fiscal discipline, personal responsibility, or adherence to the intent of the Constitution.
The Constitution is hardly a practical document. It rarely delves into details, and largely prefers to state a general idea or principle. It does this because it is a statement of principles. It describes an ideal state in which power is always balanced, poor leadership by a few is irrelevant, extremism can be nullified, and where the people truly are the ultimate authority. The system we have now shows that with 200 years, a fist-full of wars, and a willingness to bludgeon the masses with extreme and misleading concepts repeatedly, you can pervert even the most beautiful government.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
No tax or Duty shall be laid on Articles exported from any State. US Consitution
The states have no right to, it unconstitutional to, claim taxes on items you purchase from another state either via internet , mail order, or any other means.. It is in the constititution from day one because it was abused back under the articles of confederation when states put tarrifs on goods coming into their state from another.
The first progressive income tax system was created in the 1860's to (partially) fund the civil war. Relatively soon afterwards it was declared unconstitutional; that the constitution as it stood required the same taxation rules for all citizens (e.g. a flat tax rate). The government had a big need for money again in the early 1900's; so it forced through the 16th admendment.
Some people claim that the vote in the final state that ratified the admendment was rigged. In my opinion that's pointless; if they ever managed to get a court to try to overturn it, a new admendment would go through within days. Government at all levels is too dependent on it.
It's worse than that.
Even if you never spend that dollar,
it still gets taxed twice:
once when you earn, and again when you die.
There's definitely one state (Oregon) that doesn't have a sales tax. And I think there's at least one other (New Hampshire?).
Now if that wouldn't be a violation of the Commerce Clause, nothing would be.
What'd you do, go and RTFC?
This is /. - you're supposed to misquote Richard Stallman misquoting Karl Marx.
We can't have any of that constitutional bullshit around here.
I thought there was a tax moratorium on internet purchases? What happened? Did I fall asleep....yawn..
It's that simple. All governments govern their populace through the threat of force. Your constitution and law books are just expedient pieces of paper which can be used to justify the use of force.
Government of the people, by corporate executives, for corporate profits.
Even if my state (Minnesota, one of the most heavily-taxed states) was one of these 19 states, I wouldn't pay.
Various governmental organizations already take 20% of my earnings (sales taxes, property taxes, state & federal, medicare, social security, gas, alcohol, etc...) and I don't even make all that much. If I try to make more money, they'll end up taking an even larger percentage. And what does it get me? Not a whole hell of a lot. Over 50% of the federal budget goes to medicare and social insecurity and welfare and I don't and probably won't get any benefit from any of that. My property taxes go to the schools, but I don't have kids. Minnesota is spending close to a billion dollars on a frickin' train that goes to three places at about 20 miles an hour.
I'm getting sick of it. What the hell happened? Americans from 200 years ago would start a tax revolt if the taxation were to get above 10%. And don't tell me that the government needs that money to pay for all the stuff it's doing. The government shouldn't pay for everything. Cut spending rather than raise taxes, how simple is that? Freedom to keep the fruits of your labor without excessive taxation was one of the earliest principles of classical liberalism, and people just don't seem to care that it's gone.
No way, sorry. I buy on the net to save money, and part of that saving is the tax saving.
Why on earth do we have sales tax anyway? Either tax it when I get it (income tax) or tax it when I spend it (sales tax), but why the hell do they get to tax every friggin dollar I get *twice*???
It's even worse than that! After you've paid for your widget, the Widget Company declares that dollar as income, and pays taxes on it. Then it uses the remainder to pay its Widget Employees and they're taxed on it. Then they take their income and buy a doohickey and are charged sales tax. Then the Doohickey company declares income and... well, you get the picture.
Bah weep granah, weep ninny bong!
Oy. I meant $25k a year. It's all me stupid K key's fault! I swear! :)
jX [ Make everything as simple as possible, but no simpler. - Einstein ]
We also have no sales tax.
When I'm out of state, if I see something I want to buy, I always tell the seller "I'm from Delaware, I don't have to pay your sales tax!".
Occasionally I find somebody who will eat the tax for me... and if it's a large purchase, I sometimes make it a condition of sale.
Obviously it doesn't work on soda machines.
:P
Go on, hit "Funny"
I haven't posted in so long, my sig is out of date.
A progressive income tax makes sense because it does not (in principle) burden the lower classes overly much. Any means of taxation that does not take income or wealth into account runs the risk of taking too much from the lower classes that they become overburdened.
I know that on some level it is unfair to take more from the rich (especially as a percentage of their income) just because they can afford it. But practically speaking it is the best way to do things: the point is to burden everyone the same, and taxing purchases (or income at a flate rate) doesn't do it. If you take 10 percent of the income of somebody making $30,000 per year, it is considerably more burdensome (given that there is a set cost of living) than taking 15 percent of the income of somebody making $1 million per year.
Because this system is in some ways unfair, I believe it should be limited, and that the best way to limit it is to limit the spending of governments. It doesn't entirely eliminate the unfairness, but it helps reduce the brunt of it. This thread, however, has been about whether or not we should have an income tax at all, not whether the present system is a good one. I would affirm the former principle and deny the latter.
Does that position make sense? I am happy to clarify it further. As for the rest of your post, Loki, there is a lot to dissect there but I would rather not do so. I agree and disagree in about equal measure, but it is very general in its nature and as such hard to comment on.
Yes, the argument is that Amendment 16 wasn't properly ratified.
Looking at Article I, though, shows that's not a valid objection - Amendment 16 merely removes the "but all duties, imposts and excises shall be uniform throughout the United States" part of Article I.
It's unreasonable. However, unreasonability is not an obstacle to the law.
Considering every court has thrown the tax doubters out on their asses, I'd say that's fairly good proof that their arguments don't have any legitimacy.
purchases.. on the internet?
I make these: http://beatseqr.com
The Commonwealth of Virginia has been
doing this for about 4 years now, for
internet and "catalog" sales.
BTW: I had an experience with a NY
state electronics (chips) distributor
that was ludicrous: without the benefit
of having a resellers license, they wanted
to charge me VA state sales tax. That
is (IMHO) illegal, since they do not have
a "presence" in VA, and no cross-state
agreement. The tax money collected would
have (likely) just gone into their pocket.
I pay the sales tax, because it is the law,
but use the VA income tax forms instead.
Then I do know where that money is going.
found it; line 51 "Use Tax. See instructions." I don't have the instructions handy but I assume that's where it's included. My accountant left it blank (no "0") which is what I imagine is standard practice; I can't see them enforcing this if it is so common to leave it blank.
"They control the composition of the SC "
;)
They control the appointment of new Justices. So long as the current court remains intact (no one steps aside or dies), neither of the other two branchs has any control over its composition. Ask FDR about this one.
"They control the entire makeup of the lower federal court system, and could thus effectively remove all of the SC's appellate jurisdiction (robbing it of the means to hear the vast majority of cases)"
Article III, Section 2 would seem to disagree with your assertion that the Supreme Court's appellate jurisdiction could be removed. From that section:
"In all the other cases before mentioned, the Supreme Court shall have appellate jurisdiction, both as to law and fact"
To remove the Supreme Court's jurisdiction in all cases, you'd have to ensure that no one ever appealed any court decision to the Supreme Court.
"They control all the money"
And thus, the crux of the issue here. Then again, the Constitution also states in Article III, Section 1 that their compensation (paycheck) cannot be decreased during their time in office. This goes back to the point in number 1, about the SCOTUS being effectively non-dependent upon either of the other two branchs.
"They have the military"
This is the kicker here. It's the one wildcard in this whole mess. Were the Supreme Court to issue an order/ruling which is then negated by military action of some kind, it would signal the end of our Republic. The ultimate battle would be in the hearts and minds of the soldiers and commanders themselves. Do you follow a lawful order from the Supreme Court? Or do you follow the (presumably unlawful) order of your commander in chief? Most military folks are fiercly loyal to the CnC (heh, I just made that up), but this type of question would really tear up a lot of people. If the government were to endure such an event sans revolution, I think it would be little more than a puppet of a small group of individuals. It is at that point that the Great Experiment would be completed, albeit as an utter failure.
If this day comes, I can only hope that I've long since died. I don't know that I could live through something as aweful as this happening to the nation I love so dearly.
" it would be crazy -- and completely out of character -- for the SC to directly contradict a Constitutional amendment."
It would be unprecidented, but it's not as though the SCOTUS hasn't used word games to get amendments to mean new things (or not to mean new things, as the case may be). Look at the 16th Amendment. The SCOTUS held multiple times that it confers no new taxation powers upon the Congress, but merely defines the Income Tax as an indirect excise tax. Thus, the entire purpose for the Amendment (to get around that pesky Constitution thingy so we can grab peoples' cash) is negated. But don't worry, the Income Tax is only temporary. The Federal government stated this repeatedly so as to get the amendment passed. Luckily for us, the Federal government always keeps its promises. If you have any doubts about this, just take a trip out to the open plains and talk to some Native Americans; if you can find some that are still alive.
"If the SC ever just decided to nullify an amendment in such a way, we would basically have to abolish or drastically limit the court's power."
For the Supreme Court to take such a drastic step, I believe we would have to have far larger problems at hand to create such a situation. When the time comes that Supreme Court finds it necessary to take the drastic step of killing an amendment, I think judicial tyranny will be the least of our worries.
"The head tax idea is interesting but extremely unlikely."
The head tax argument is just one of many arguments against the Income Tax. The shady history of the 16th Amendment, the arguments against an indirect excise tax being applicable to in
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
Here you go, straight from the horse's mouth.
http://www.boe.ca.gov/sutax/isvdprog.htm
I think the DC Taxation Without Representation license plates are awesome :)
As a non-American I must say that I am puzzled. Europe is supposed to be a far less integrated market, yet when I buy a product in any EU country, the only tax that is paid is the sale tax (VAT or equivalent) in that country. Since there are basically no restrictions on goods movement I can then take the stuff that I bought anywhere I please, without tax concerns. That is what a single, unified market without frontiers is supposed to be all about.
Now, the US is a strictly integrated economic environment. Why do interstate taxes exist at all? Aren't they arbitrary restrictions to the movement of goods? What about free market and free competition (even between states)? Please enlighten me.
Here is one such advocate:4 10122.html
http://www.lasvegassun.com/drudged/032
Pretty soon he'll be paying taxes out the ass.
If you'll wipe the spittle off your face, you'll note I quoted the 16th Amendment right below my quoting of Article I.
Ratification of the 16th Amendment was also conditional on its being a temporary measure, as opposed to a cash cow for a massive Federal Totalitarianocracy.
Doesn't change the fact that they decided to keep it, eh? Like it or not, it's a constitutional amendment.
The Founding Fathers specifically stated in two seperate places that the Congress may not lay direct tax, except in proportion to the census. They couldn't have been more clear if they'd carved it into Jefferson's skull and stuck his head on a pike in the middle of Philly.
The Founding Fathers also established an amendment process in Article V, permitting an overwhelming majority of Congress and the States to change the Constitution.
You could always argue that the 16th Amendment repealed these parts of the Constitution, but it does no such thing. Thankfully, the Supreme Court has already taken care of settling any dispute you and I might have about this. They did so in 1916, Brushaber v. Union Pacific R.R. Co., 240 US
From that decision:
Whoops, there it goes. You may find it hard to argue with that, but the Supreme Court would respectfully disagree. If someone has the money to take such a case all the way to the Supreme Court, we might all get a huge (as in 100%) refund from Uncle Sam in the next few years.
Article. I, Section. 9. No Tax or Duty shall be laid on Articles exported from any State.
9/11 Eyewitnesses to Explosive WTC Demolition 1 of 2
"Not only that, being the organized person that I am, clearly I have kept an accurate record of every internet transaction I made in 2003."
You're organized enough to keep track of your income tax info, right? You have to be. And now you know that you'll have to keep track of your out-of-state purchases for this/next year. You can't claim ignorance anymore. If you don't keep track from now on be actively flouting the law.
I don't know that they expect to get a lot of revenue from this right away; it's mostly to get people's attention, I'd say. And it got yours, it seems.
On the other hand, though, I imagine that by looking through your credit card statements (you *do* keep those, right?) you can come up with a pretty fair list of things you bought out-of-state.
Clearly, however, a national system would be more convenient, and yield better compliance.
p.s. http://www.fraudsandscams.com/sixteenth.htm
"even most libertarian states require some money to operate."
:)
They certainly do, and the Constitution provides the means for legal taxation to ensure the government has all the money it needs. If the government has grown to such a size that it can no longer sustain itself via legal means, the solution should not be to throw more money at it, nor extract money from citizens by threat of imprisonment. The reason the government is as large as it is is because it has usurped authority and responsibilities from the states and individual citizens in violation of the 9th and 10th Amendments, amoung others. I'll bet if we went over every inch of the Federal government with a fine-tooth Constitutional comb, we'd be able to cut the Federal budget in half simply by eliminating aspects which are illegal to begin with.
As for taxation, I think a consumption tax is the best way to go about it. Think about this for a moment: you're suggesting we should tax the wealthy more than the poor. I would agree with this entirely. My question for you is this: who buys more, and who buys expensive things? Joe Sixpack makes $30,000 a year, and is (presumably) spending that money on a bunch of little things for the family and such. As such, his spending habits are limited to buying a maximum of $30,000 worth of stuff. We could define certain necessary items as non-taxable, like simple foods. From there, the consumption tax takes form. Joe Sixpack buys a $19,000 Honda, and pays a tax on it. Joe Millionaire buys a Jaguar, a Porsche, an H2, and a small jet. He pays a tax on each of those items, which, when based upon the value of each, turns out to run far in excess of Joe Sixpack's tax. Thus, the wealthy are indeed taxed more (assuming they choose to take advantage of being wealthy), and the little people don't have to worry about April 15th killing their rent money.
There are far more things to discuss when it comes to a comprehensive taxation system, but I think the overall simplification and fairness of a consumption tax, as opposed to an income tax, far outweighs the difficulties of moving to a totally new system.
In the end, I continue to support the elimination of the (unconstitutional) Income Tax, in favor of a more fair tax plan, a vastly reduced Federal government, and perhaps even a might bit of fiscal discipline.
As for my previous post, I would assume at least one issue you'd raise would be with regards to Lincoln. I wouldn't bother with that one; you wouldn't understand/care if you're not a Southerner by birth as well as by heart.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
No but how about this: "OK, sir, your federal schedule C for your home-based business indicates $2700 in computer equipment. Can you verify that?" Of course, if your verification consists of a receipt from an online retailer, bingo, yer busted.
"And women weren't supposed to get the vote."
And those were better times. And we had a less corrupt government.
It's a travesty of justice that you weren't modded +5, Funny
If you think the U.S. Supreme Court is going to say you don't have to pay income tax, dream on.
But first, read Cheek v. United States, 498 U.S. 192 (1991) describing these "I don't have to pay income tax" arguments as obviously frivolous, followed by United States v. Cheek, 3 F.3d 1057 (7th Cir. 1993), the decision upholding Mr. Cheek's prison sentence.
How could the state government possibly tax undigested food that food that was purchased and consumed out of state? Risible.
They'll simply levy a 6% tax on your turds.
Seriously though...
Since NH has no sales tax this is something I don't have to worry about. I almost feel bad for any politician here who'd try that... we haven't had a good lynching in a long time (if ever) but I bet we could figure it out real fast.
This year, I'm going to track things very carefully, and pay only what I need to.
Your Servant, B. Baggins
Is it just me or does "use tax" sound a whole lot like "tea tax"?
Whether or not it would work is debatable, but it's better than what we have now.
.gov website, punch in the delivery ZIP code and then be told how much state and local sales tax they have to collect from the shopper. Anually/quarterly/whatever they then send that money and paperwork off to said agency which then redistributes it to the states and localities it belongs.
If/when we ever get around to a national sales tax replacing national income tax, replace/reform the IRS so that it functions as a sales tax clearing house. The mail-order/internet shop could then place a 1-800 call or go to a
The only real problem I can see here is the added record-keeping for the store, but I'm not sure it's all that much worse than what they have to do already. And on the flip side you get rid of this silly idea of all but declaring everybody a criminal by default.
It won't touch those "use taxes" some states have for products you actually physically purchase elsewhere (since they're already paying the sales taxes of where the store is located), but as I write this I wonder if those taxes are even constitutional (they sound like interstate tariffs to me...)
I would like to get payed for providing FUCK ALL too.
I consider myself an honest person, e.g., I'll bring errors in a restaurant check to the server's attention even if they're in my favor. However, if my state wants to tax me for internet purchases, they'll have to come up with a way to do it that doesn't require me to keep track of every single purchase. If you're going to collect money from me against my will, then don't expect me to volunteer, for $ORGANIZING_PRINCIPLEs sake.
The fact that I actually do keep track of every single purchase is beside the point. Most people don't, so this ends up being a tax on the conscientious. Shouldn't governments reward conscientious people??
Yeah, I live in Alabama, but I think it would be very hard for them to prove that anything in my house was actually bought online short of subpoenaing my credit card records. A state audit won't normally go that far unless they really suspect something.
Besides, it's not that much. State sales tax here is only 4%, though local sales taxes add more. If I bought $1000 worth online the state sales tax would only be $40 - big fucking deal.
I think Amazon is in Washington, they could just move to Oregon and side steep the entire issue. I guess.
I wouldn't put it past a money strapped state in trying to add something like this. They would fail, but I bet they will try--especially in Taxachussetts where they tax just about everything except air, food, and clothing. I think they are working on taxing air though ;). Thank God I live in New Hampshire where the state moto is Live Free or Die.
At the next eco-hypocrisy-meeting, count the private jets used to get to the meeting. Should be interesting to see that
According to a recent Forbes article about how archaic IRS computer, do you think they would able to cross match buying expensive mail order equipment out of state? Hell, I can't even deduct my equipment.
I'll do more net purchasing if I dont have to pay that 8.25% CA state tax.
State can tax my purchase over the internet when they start offering low cost high speed internet access. I consider my monthly ISP payment as a tax already.
This day already came and was brought about by Andrew Jackson who ignored a Supreme Court ruling and continued to allow the Cherokee Native Americans to be driven off their lands. Worcester v. Georgia. There's a choice quote from Jackson, "Let's see the Supreme Court enforce its ruling."
The problem with any federal consumption tax, however, is that it would be a clear violation of the Constitutional limits on Federal power. The Federal government clearly has no jurisdiction over the purchases I make strictly within my own state unless some *very* tortured interpretations of inter-state commerce are employed.
:))
One can make the exact same argument for taxing income earned solely within a state as well. The Supreme Court has held time and again that the 16th Amendment conferred no new powers of taxation upon the Federal government: In other words, despite the apparent universal phrasing of the 16th Amendment, it could still only tax income from sources (without apportionment after the passage of the 16th Amendment) over which it had jurisdiction granted to it by the Constitution - the 16th Amendment didn't magically extend the taxing power of the Federal government. If it did, why not tax everyone, everywhere in the world? Certainly the Federal government could use the additional cash flow now, and Canada isn't that far away - send in the IRS storm troopers and make 'em pay up! (Just kidding, honest
In all seriousness, however, any income that is deemed taxable by the Federal government must be so under the limits of Federal authority as set forth in the Constitution. Since the Federal government has no authority over *intra*-state commerce by virtue of the Tenth Amendment, it clearly has no authority to tax income earned in such a manner.
"Mark, of course, in saying this we are not here considering a tax... entirely beyond the scope of the taxing power of Congress, and where consequently no authority to impose a burden, either direct or indirect, exists. In other words, we are here dealing solely with the restriction imposed by the 16th Amendment on the right to resort to the source whence an income is derived in a case where there is power to tax..." [Stanton v. Baltic Mining Co., 240 U.S. 103 (1916)]
"The Sixteenth Amendment... has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects..." [William E. Peck & Co. v. Lowe, 247 U.S. 165 (1918)]
Those two quotes alone show that the Supreme Court understood (at least between 1916 and 1918) that there were real limits on the taxing power of the Federal government. Such limits were not only real, but necessary.
Not that that matters - trying to argue the law, especially Constitutional law, with the IRS is futile at best, and may get you a prison term if you irritate them badly enough... and the Supreme Court will *never* hear any tax case centering around the Constitutional limits of Federal taxing power, just as it refuses to hear any cases concerning the 2nd Amendment. And the saddest part of all of that for me is with that understanding comes an awareness of how truly corrupt our Federal governement has become in *all* its branches. They are all in collusion now, and the concept of seperation of powers doesn't work when "You wash my back and I'll wash yours" is the rule of the day.
So, that's the end of this little diatribe - hope you enjoyed it. Welcome to the real America - it was once a wonderful place to live, honestly.
Frankly, I can't see any way to do it without physical segregation. Essentially what I propose is that we separate America into two or more geographical units so that the people who would rather see people with a health problem and no family die in the street can live somewhere far away from me.
My problem with taxes is that the federal government has no motivation to be efficient, and in its current (devious) mode of operation it cannot and thus does not tell the people what it is doing. This is because it is in the process of fucking the American people over, not to mention running around telling the whole world what to do. Not only is this incredibly arrogant on multiple levels, but it is not a system that can be maintained indefinitely.
The largest deficit in the constitution is that it does not adequately provide for the rights of states. To me it seems that the only reason we divide our nation into states today is that it becomes easier to tax us this way. The federal government is taking more and more power for itself and sooner or later there will be only two organizations allowed to exist in America: The US government, and a megalithic corporation which builds everything (kind of like GE).
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
the place you get burned is traceable purchases.. vehicles, boats, homes, RV's... something you have to register with the state they had better see on your tax return...
also if you bought anytihng that cost $5000.00+ I reccomend claiming it, your bank notified the feds on that purchase so there is a government trail of that transaction.
Do not look at laser with remaining good eye.
Note the end of that sentence: "and under such regulations as the Congress shall make." That's the kicker. Congress has in the past changed the way that the Court gets its cases and could conceivably just get rid of the entire federal appeals process (III, 1 gives the Congress total power over the entire composition of the federal court system).
Were the Court to just overturn a Constitutional amendment, I would say that order was unlawful, as it completely goes against even the most activist principles I can think of.
This is about the only bit I agree with. This entire line of reasoning is interesting but so very unlikely I'm not worried. But, yes, if the SC just flat-out ignores a Constitutional amendment, we have huge problems.
"I remember hearing a governor say that at some point, it's going to come down to having his highway patrol stop all the little brown (United Parcel Service) trucks and see where the stuff is from and where it's going."
And what happens when they pull over a USPS truck? Will it result in a state versus federal government struggle?
Isn't Sales Tax a Tax on a Business for their profits/sales by a Government(any level), which is passed on to the Consumer by the "I'm not gonna pay it, let the consumer deal with it" attitude of Business "Economics."
Texas has a sales tax, but no income tax. We do not have personal income tax forms.
Not only that, NYS has agents that check the plates in these out-of-state clothing outlets and they leave leaflets on the windshields pressuring citizens that they are evading sales tax. How's that for heavy handed tactics?
NYS has done a great job of taxing citizens and jobs out of the state and I am moving away once I am in a position too, because I have just become unemployed and there are no jobs here. Good riddance NYS, and to hell with your Gestapo tactics and your broken tax system!
Eternity: will that be smoking, or non-smoking? I Corinthians 6:9-10
From what I remember when I lived in NC (it was at least 3 years ago) that the state tax form had an item to report out of state purchases so they can be taxed. If you didn't remember how much exactly you bought, there was a blanket $1000 option with certain tax amount that you could pick....
How could you avoid sales tax in out-of-state malls? Did you just show your ID and they set tax to 0% for you? Is this still valid today?
I was wondering who the OTHER state was that owned the LIQUOR stores. Now I know.
Yeah, that's illegal, and always has been. Every once in a while people get busted on big purchases (car purchases are pretty routinely caught, because the authorities know which dealerships are just on the other side of the border, and there's all the registration and whatnot).
"The question of whether a computer can think is no more interesting than that of whether a submarine can swim" -EWD
If you ask the Indiana authorities, they will tell you that you have to pay in Indiana. If you ask in Illinois, I'm sure they'll tell you that you must pay there. When you point out that you're already paying in the other state, they'll go back and forth blaming each other. This is usually how bureaucracies work, so I'd say your best bet is to do what you're probably doing now and avoid the issue altogether.
For large items that require title registration, you won't even have to wait until you file your taxes. They will actually send you a bill shortly after you register the item instate that was purchased out of state. At least, this is what happened when I bought a car in Indiana and immediately registered it in Chicago, IL. Mayor Daley wasn't about to wait a whole year to get his 10%, the bills for the new Soldier Field must be payed now!
Indeed, I've known two colleagues in VT that have been audited by the state, and this was exactly the approach they used. It's particularly easy, since there are a lot of brick-and-mortar stores that don't have any presence in VT at all (since they border on a no-sales-tax state which sucks the businesses over the border). So buying something at, say, Burlington Coat Factory (just to pick one out of thin air), they pretty much assume you're using in-state unless you gave to to someone as a gift.
That said, there is an easy out in a lot of "Use Tax" states---in the above Vermont example, if you didn't buy anything over $1000, then they have a handy table that estimates how much Use Tax you should pay based on your AGI. Granted, the formula is a ridiculous underestimate (seeing that most everyone mail- or internet-orders stuff, and most anyone within 20 minutes drive of the NH border does virtually all of their non-grocery shopping across the border, while the estimate claims that someone with an AGI of 60,000 only bought $480 total in out-of-state items), but that just goes to show how stupid a Use Tax can be.
We have a "system" similar to Alabama. There's a friendly little line on the state tax form for you to dutifully report such purchases. Lucky me, I actually DIDN'T buy anything online last year...or out of state.
Mutant Freaks of Nature: "Frighteningly Addictive"
States don't have rights, just as the Federal gov't doesn't have rights. They only have powers granted to them by their constituents. The same applies to county/town/city/village/etc. governments. Citizens are the only bearers of rights in the US. The sad part is, most everyone has forgotten about that, allowing the situation we are in now. :(
"Why do you consent to live in ignorance and fear?" - Bad Religion
Perhaps at the state level that is illegal. However, I believe the U.S. Constitution is quite clear in preventing states from regulating interstate commerce, which is exactly what you are discussing.
Bull. Shit.
If I buy a sofa in New Jersey, I pay New Jersey's tax. The store is not located in New York and the transaction did not take place in New York. New York has no legitimate claim to any single cent of that purchase.
If I buy a sofa online and have it shipped, I should pay whatever the tax rate is wherever that online merchant is registered to do business. My state had no part in the transaction. If they want to collect taxes from that merchant, they need to entice that merchant to move to this state.
Trying to force me to pay taxes on a purchase that took place outside of the state is extortion and I'll be damned if I'm paying them a cent.
What I mean by "rights" is the right to control what happens within its borders as desired by the people. The federal government doesn't like much of that to go on. For example, the "war on drugs". Is that called a police action now?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Either way though, it really doesn't matter. If I'm right, the courts will say so if someone trys to appeal. If I'm wrong, then the constitution will be ammended within a matter of days (most (all?) states ratify federal ammendments with a vote of the state legislature, bypassing the general population entirely).
"The question of whether a computer can think is no more interesting than that of whether a submarine can swim" -EWD
Before i tell anyone where or when or how much i paid for something! if they want to collect taxes then it should be collected from the sellers not expect us purchasers to tax ourselves! screw them! also does anyone here on /. know if this applies to purchases/sales on ebay for used items?
I am being advised to place a number in that line, just to avoid being audited? That's messed up.
There's a hole in that theory. The Supreme Court has ruled that corporations should be legally considered as people, and there are plenty of corporations that pay no tax.
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
Assuming carnivore/echelon even exist. Stupid folklore.
The various States are calling their sales tax "Use Tax" where it applies to the Internet. But they call it sales tax within the state. Essentially, since the purchase is made out-of-state it acts as a tariff on goods from another state, which is prohibited by the federal Constitution. And the reason why the various States have not made more than a token stink about this is because they must think they would lose if they went after someone who had enough money and time to take their case to the US Supreme Court.
Since my state wants to call it a "useage tax" on one hand (making it constitutional if they can collect it) and a "sales tax" for product bought and sold within the state, I shall allow my state to first prove that I am using the item purchased and then send me a bill, based on the actual usage observed.
I should mention that I purchased a number of gifts on-line that are currently being used (and not by me) outside of my home state over the holiday season last year. Since I never intended to use the product and never did use the product, how can they claim usage?/p?
Gods don't kill people, people with gods kill people.
>The same way roads were funded up until 1913
E.G. they weren't. Until that point, most roads in this country were unpaved disasters, generally two-land roads. Imagine driving from Boston to Washington DC on all local streets and country roads. It wasn't until the advent of federal taxation and the grants that went along with it that enough resources could be mustered to build large highways (starting with New York State in the 20's thanks to the work of everyone's favorite megalomaniac, Robert Moses).
And don't kid yourselves - parasite states like Delaware (my own) which have low/no income tax, or no sales tax, find ways of compensating for the lack of money. Delaware, for instance, poaches its section of I-95 mercilessly, charging outrageous tolls which cause miles-long backups on the interstate while doing virtually nothing to actually improve the quality of that road - all of the toll money goes to local road construction. Or, another Delaware invention, they attract huge corporations to the state so they can earn incorporation fees, thus earning several thousand dollars for themselves while depriving the original homes of those companies of millions of corporate tax dollars. If you're paying Paul, you've got to screw Peter somewhere.
IANAL either. However, I have read the Constitution in its entirety and contemplated the meanings within, something I'm convinced many of today's lawyers have not done. I have also studied and researched Constitutional issues for my personal development and university coursework.
I feel that you're overlooking a very big checks and balances system. The members of the federal Congress, though elected from states, are largely outside the sphere of influence of the state governments. I think the 2/3 vote to send an amendment to the states for ratification would likely not occur. Fortunately, there is no method in place for the Supreme Court to mandate an amendment be sent to the states.
Beyond the amendment issue, you are reasoning that because someone can get a better deal in another state on a purchase, the deprived state has a legitimate claim. That is not the case. If a state cannot attract profitable businesses or develop a solid revenue model, they have no business taking the revenue from states that encourage commerce and have taken steps to simplify their own tax systems. The "offended" states should study the open market's behavior and find out what they are doing wrong.
Also, you are assuming that every state that is drawing these sales has no sales tax. What if they merely have less of a sales tax? To paraphrase from the Constitution, "full faith and credit" should be applied to the acts of other states. So, if your citizens have already been taxed on a purchase in another state, they have fulfilled their obligation. If the state in which the purchase was made did not require sales taxes, they have also fulfilled their requirement. Therefore, their home state has no jurisdiction. Residents of states can claim states as their home, but states can not claim residents as their property (slavery by the state?) to control at whim.
References: Article IV, Section 1; Article 1, Section 10; and Article V of the Constitution of the United States
Most of the time /. is full of insightful posts. This thread seems to have brought out the goofs. I cringe to see how many people have posted messages here saying a) "This is a new kind of tax," b) "They can't get away with it!", c) "They'll never catch me," d) "This must be unconstitutional," e) "It can't apply to me," f) "It's way too much paperwork/effort/headache for me." I hate them too...but sales & use taxes are the law of the land in most states, and have been for many years.
If you buy something out of state, via internet, USPS, telephone, or goddamn Pony Express, you probably owe your home state the same tax you would have paid if you bought it locally. Usually you can deduct the taxes paid out of state. It's a pain in the ass but it's not new -- and it's not the state taking a diabolical liberty because of the Internet. If you don't like it, move to a state that doesn't have a sales & use tax. There are a few.
When states crack down on use tax violations, and most of them do from time to time, they hit violators pretty hard. You shouldn't be surprised at how easy it is to catch violators. If you use your credit card to buy stuff from out of state, and it gets delivered inside state borders, you don't really have a leg to stand on. Most states don't really go after you until they have a strong motive, e.g. they are already auditing your income tax return, or they get info from a vendor about a $10K purchase. But when they get the bit between their teeth, they come after you hard. Why wouldn't they? The tax, fines, and interest will pay for a lot of investigator salary.
Really, this is just Life 101 stuff. You can't evade other kinds of tax; why do you think you can dodge this one? Again, if you don't like it, move to a state that doesn't do it. If you want to stay in New York, Connecticut, Illinois, California, whatever, then deal with it.
-- We all have enough strength to endure the misfortunes of other people. La Rochefoucauld
You can credit taxes paid in another state against use taxes in your state.
The object isn't to get you to pay taxes twice, it's to remove the tax-free benefit of going out-of-state to buy goods.
paintball
Okay, one question for you then. Why do all the Supreme Court justices pay income taxes?
"Why do all the Supreme Court justices pay income taxes?"
Because their government has threatened them with lengthy jail terms if they refuse. I believe I'm right, but I continue to pay my taxes. Why? Because I cannot afford to be wrong.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
That's my dilema. For my personal stuff, I buy things locally -- I want to see them and check them out before I purchase, especially big ticket items like computers, notebooks, PDAs.
I do purchase online, but here's the gotcha. These purchases are almost exclusively for gifts for out of state family and friends, which I have shipped to a state other than the one I live in (since I'd have to ship it to them anyway).
For example, I live in NJ, but purchase something in CA, for delivery to NY/CT/CT/VA/CA, etc. Since I don't get the product, as far as I can figure out, the use tax doesn't apply.
Many of the web site I deal with do charge NJ tax anyway -- should I get that refunded?
Can You Say Linux? I Knew That You Could.
You pay tax on money you do earn... why complain about receiving money that you did not earn and being taxed on it?
None of these states are taxing imports
They are most certainly taxing imports.
they are taxing all purchases the same
They don't have the authority to "tax all purchases."
out of state taxes are collected via tax form
Unconstitutionally.
My state's schools, roads, and parks need to be paid for too.
Start by reducing the unnecessary paperwork and bureaucracy. That would probably save 50% of every state budget.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
If someone has the money to take such a case all the way to the Supreme Court, we might all get a huge (as in 100%) refund from Uncle Sam in the next few years.
Rest assured that if the Supreme Court did say income tax was unconstitutional, it would be only a matter of days before congress and the president passed a constitutional amendment to change that.
For every post, there is an equal and opposite re-post.
Anyways, since it wasn't a problem - just looked in my eBay email folder and totalled all out of state purchases, multiplied by CA tax (7.25%), subtracted any out of state taxes (none) and then deducted from my refund.
Why because A)it wasn't hard for me and B)as much as we grumble about California's skyrocketing costs, it is worth a few (the term is: FEW) extra $$ to live here.
BTW - Haven't they been doing out-of-state tax catch-up with car purchases for a few years now?
"Enjoy what you're doing! If it becomes drudgery, you're doing it wrong!" - Jim Butterfield
> Ask Slashdot: Are You Reporting Your Internet Purchases?
No.
The space unintentionally left unblank.
...My state (Massachusetts) taxes all embezzlements and otherwise illegally obtained funds.
So if you want to do some embezzling, money laundering, or just a little misappropriation, don't come to Taxachusetts.
How these people propose to fund the building of the roads that they will march on in protest is unclear, but it's an interesting case they put forward from a legal point of view.
1) The income tax is not the only tax. Not by a long shot. The US didn't have an income tax until 1916, IIRC, but there were roads before then. Several US states don't have income taxes, but they all seem to have their own state road systems.
2) The law trumps the law. The case these people put forward may be legally sound, the law still says you have to pay income taxes. In fact, anything the government says you have to you, you have to do.
Don't blame me, I didn't vote for either of them!
Unfortuantely, you can't just pass a constitutional amendment "in a matter of days". The process requires that the country at large take part in determining whether or not it is right and proper. It's one of those little safety measures to keep the government from rewriting it's charter without consent of the people.
Comment removed based on user account deletion
Whether or not their arguments have any legitimacy is irrelevant. They want the money.
I think there's a lot of prejudice in these cases, even for judges, assuming "these people don't want to pay their fair share", rather than investigating the possibility that he is paying his fair share, and everyone else is getting ripped off.
Indiana has had this for years, and I've noticed it recently on Ohio tax returns as well. Not only does it apply to Internet purchases, but purchases from mail-order catalogs, magazine subscriptions, etc. Essentially anything that you buy out of state and have shipped to you. Keeping track of it is a total nightmare. There's no way that I can recall every single instance where I've purchased something online or mail-order. And then there's the entire grey area of what counts as a taxable purchase. Is it only a tangible product that's shipped to you? What if I live in Indiana, buy something from a New York company, and have it shipped to my friend in California? What if I buy a copy of my credit report from an out of state company that is delivered digitally? What about subscriptions to pr0n sites? What about services? If I use Turbo Tax for the web, do I have to pay use tax on the $15 filing fee? And not only is trying to keep track of your purchases a nightmare, enforcement is nearly impossible. The state would have get lists of purchases made by residents in their state from out-of-state merchants, which would be pretty much impossible. If the merchants are out of state, then there's no way to compel them to cough up the info. And if they operate in the same state, then they're already collecting sales tax. Generally, I think it's a joke. States are worried about losing tax revenue because of online shopping, but nobody knows how to recoup the loses, so they make a crazy law that nobody will follow.
It's amazing that the grandparent was modded higher than the parent. Once again, truth takes second place to Slashdot popular opinion...
"Politicians and diapers must be changed often, and for the same reason."
Yes, I reported my out-of-state internet purchases (I live in California). Call me stupid, but I believe that the taxes that I pay help build a better society. Call me stupid, but I believe the roads I use, that schools my (future) children will use, the protection and comfort that I enjoy right now COSTS MONEY, and everybody has to pay its share.
I really don't understand people who are evading the IRS and trying to find every possible (bad) reason to not pay taxes: to me, that's just greed... It's always the same: everybody wants the best public service, but nobody wants to pay for it...
I find it funny that you would answer minor criticisms such as the grandparent, but not a lengthy one such as this post.
"Politicians and diapers must be changed often, and for the same reason."
> Also, you are assuming that every state that is drawing these sales has no sales tax. What if they merely have less of a sales tax? To paraphrase from the Constitution, "full faith and credit" should be applied to the acts of other states. So, if your citizens have already been taxed on a purchase in another state, they have fulfilled their obligation.
I think you might have inspired a great idea. Think about this: It would be hard to make a case for having to pay sales tax in one state, and in the next as well. For example, if you went across from NY to NJ, bought an item in a store, and came back. Right?
So the solution is, the states with 0% sales tax should change their tax rate to 0.0000000000000000000000001% so that it still wouldn't amount to anything but a customer could point to the receipt from say, NH, saying "NH Sales Tax paid" and claim immunity from further--technically "double"--taxation. They wouldn't really have to put in a tax collecting infrastructure; they could just ask that businesses pay that percentage of their sales, probably a couple of bucks a year for the largest businesses. Just add it to the business tax forms.
My idea's not very well thought through, but it's a thought. It would really only help, in the online case, for purchases you made from businesses located in NH, OR, and other states with currently 0% sales tax.
Makes me wonder if a nationalization of this sales tax deal will end up dinging the bottom line of online retailers.
Well, and presumably it would increase the bottom line of your local retailers.
Furthermore, at least in theory, if the government gets more out-of-state sales tax revenue and the revenue is significant, they can lower sales taxes overall, or at least delay increasing them, which also helps all retailers.
California property taxes max out at 1%
Upstate NY has over 6% in places
Well, you don't pay taxes on goods you export -- this is why the sales tax has not already been paid.
You pay taxes for goods you import.
Claus
I'm in Illinois as well. When I was a teenager, I bought a used car from an out of state person. When I did the title transfer at the DMV, they asked me how much I paid for the vehicle for the tax. They added what ever tax was on to the Illinois title transfer fee.
I'm pretty sure that the extra money I paid at the DMV went to the appropriate tax authorities. I never heard another word from the state except when I received my Illinois car title in the mail.
Granted this wasn't in Chicago, but in central Illinois. But, I'm surprised that all the taxes weren't taken care of when you did the title transfer.
I don't report most of my Internet purchases to my spouse, much less the IRS.
Besides, last time I checked, 1040 didn't have a way to itemize cyberporn...
--- Generation X: The first generation to have SIG lines inferior to their parents... ---
Here's a thought. Why don't these use tax states set up inspection stations on their borders to check for out-of-state purchases by residents....
Heck there's even a term for this, "excise tax".
Oh wait isn't taxing of interstate commerce regulated by article 10 of the Constitution.
Seriously though why isn't a use tax simply a stealth excise tax and therefore unconstitutional.
If I have to pay a 40% tax because I'm more successful than the average bear, then don't complain to me about trying to support a family of >1 on a salary of 25k/yr. I consider that a "stupid-tax" on the morons that don't use birth control and/or family planning. Any real man knows and plans for the responsibilities of supporting a family, and that includes household income.
You want to know why the rich get richer and the poor get poorer? It's because being smart makes you money and being stupid costs you money.
...(although given the government's record of technology use this is extremely unlikely)...
TIPS didn't get moved/scaled back/disbanded for technical reasons.
I live in Bermuda, you INSENSITIVE CLOD!!
I'm not normally an irrational zealous dickhead, but I figure "When in Rome..."
There is a tax in ohio that is supposed to be paid on ANYTHING purchased out of state, regardless of whether or not you paid sales tax in that state.
There is a whiny section in our state tax forms that talks about how this was passed in 1930 to protect ohio businesses from people that shopped out of state for large purchases (like a protectionist de-facto tariff or something).
This kind of thing bugs me - like all of the taxes on rental cars or hotels that people pass for their cities, knowing that they won't have to pay them, but not realizing that if they ever GO to another city they'll be paying them to someone else.
+++ ATH0 +++
9.5% in Fayetteville, AR. For what, I have no idea.
*The Bill of Rights - void where prohibited by law
Actually, you know, what they should do is this. Determine the median of income between (say) $0 and $25,000 (remember to penalize the poor). Anyone below the median should have to pay an extra 10% income tax if they use the Internet. Seems fair to me; just like something George Bush would applaud. What do you think?
oregonnerd...a nerd in Oregon, of course
Is the IRS/Treasury Dept. going to provide me with an accountant(s)? It's bad enough that they expect me to calculate my own income tax bill; they're nuts if they expect me to track all my internet purchases just so I can pay them, too!
-Rich
In a transaction involving equal value, there is zero income to either party, so it's not that it's illegal or unconstitutional. It simply doesn't apply. I trade 2 hours of my time, at a market value of $25.00 an hour, for $50.00 in cash. My client has received $50.00 worth of services, and lost $50.00 in cash. He is no better off. I have given up $50.00 worth of time and received $50.00 worth of cash. I am no better off. Zero income.
Also, if you want to look at it another way, you cannot turn an inalienable right (to the pursuit of happiness, i.e. pursuit of an occupation, in case you don't understand the terminology of that time) into a privilege. The exercise of rights may not be taxed, because the power to tax is the power to destroy. The government does not have the power to destroy rights under color of law. The only reason they tax income is through semantic manipulation. Everyone has an absolute right to pursue lawful employment or self-employment, to trade their time and effort (the basis for all private property rights) for remuneration whether in the form of currency or physical goods. Then again, Americans are mostly sheep who will follow along with whatever Donald Duck tells them to do (referring to a WWII propaganda film by Walt Disney, in case you were unaware).
Income is only derived from activities involving banking. Interest, capital gains, appreciation of value, etc. Working is not an income-producing activity for most people.
In the end, you don't argue with the wording, you argue that the wording doesn't apply. That's how the law works. In most cases, the 16th amendment is simply irrelevant.
Even if they managed to convert the right to employment into a privilege, it would be immoral and unethical, and should be ignored. Then again, Americans are still sheep. Oh well, too bad for them.
..gald about living in the states.
I live in germany. We've got the worlds most complex tax law with special laws and rules for every case you can think of. 70% of all worldwide publications dealing with tax-law are for the german tax law. That should give you an impression of paperwork. If you think the US is tough in terms of paperwork, come to germany.
I'm a freelancer and have actually got a manual for my upcoming 2003 anual tax decleration lying right next to me now. I keep pushing it in front of me until the very last moment - as usual It's 500 pages thick and doesn't even cover all the stuff I'd really need to know. I'm cutting corners here and there, like declareing purchases from abroad as normal ones. Screw the extra 4% percent I'd get back on income-related VAT (or toll in this case), it's much less work for me and I figure if they ever get pissy with me for not declaring those 50 $ a year properly, they'll notice they'll actually owe me something rather than otherwise.
Burocracy is currently the single largest problem in germanys sick economy. If the politicians don't fix it and don't fix it quick, we're going to be back in post-war-land faster than you can say 'Achtung, baby!'.
We suffer more in our imagination than in reality. - Seneca
While slightly 'side topic', one point I haven't seen is that, from an economics point of view, sales tax is actually 'better' than income taxes.
Let me explain - income tax is levied on you based on your gross income minus adjustments (401K etc, but they'll get it eventually). You don't get much choice, and the government taxes you without (much) regard to your expenses (someone making the same amount as I, but who has 2 kids probably shouldn't be taxed at about the same rate as I am, with no kids and a BMW).
Enter sales tax. You get to choose. Don't have sales tax on essential items - food, clothing and shelter. Tax non-essential items at a higher rate. You have a choice. If I don't want to pay $5K taxes on a car, I can get a cheaper car, or walk/bus whatever. If I don't what to pay the tax on a new Mac I just don't buy it (well, Mac may be essential).
The point is, with sales tax, if you don't want to pay the tax, don't buy something, with income tax, if you don't want to pay the tax, stop working and start living off the dole.
BK
"None of us are as dumb as all of us." - meeting mantra
okay... Show me how to trim half from these programs (2003 budget numbers):
- Interest on the debt ($181,000,000,000)
- Social Security ($472,000,000,000)
These add up to about 1/3 of the budget and neither has hardly any management costs (less than a few percent). If you want to see the raw data, look at the white house's budget page. They are in the summary tables section."Okay... Show me how to trim half from these programs (2003 budget numbers):"
I'll do you one better, I'll eliminate about 90 - 95% of your total here. Seeing as our Constitution enumerates the powers given to the Federal government, while specifically stating that all other powers are inherently reserved for either the states or the people, please show me how the Social Security program is constitutional. Should the states each decide to undertake the creation of a social security program, they're welcome to do so. However, the Federal government has no right to do so, and is therefore doing so illegally. Please don't talk to me about the wonderful benefits of having a Federal social security program, as I remember quite clearly that the road to Hell is paved with good intentions. Once you've eliminated Social Security from the bill, along with all the other programs and such that are unconstitutional, the interest on the debt is reduced to nearly zero within a few years, as you can pay down the national debt instead of building it up in record amounts as our resident President is doing.
The ability of the Federal government to borrow money was intended to be used only in emergency situations, such as in time of war. These days, it's quickly becoming miraculous to even begin to talk about not borrowing money for the Federal government. If the government shutdowns a few years ago taught us anything, it's that we've gone way too far in our government spending. Social Security is a non-refundable, mandatory, interest-free loan to the Federal government. It's one of those things that looked real good for those eating out of trashcans in the 1930s, but which actually turns out to screw us all in the end.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
"The basic "need" for it is the desire of government"
:)
"I need it because I desire it" seems to be the underlying principle for the vast majority of the Omnibus spending bill.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
" I find it funny that you would answer minor criticisms such as the grandparent, but not a lengthy one such as this post"
Longer posts take more time and effort to dissect and properly answer. What's funny is that you take a lack of instantaneous response as evidence of a non-response. The long and short of it is, I'll respond when I'm damn good and ready.
Have a nice day.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
If you live in Massachusetts, make your large purchases in New Hampshire where there is no sales tax.
Or better yet, Rhode Island, where you can pay a special reduced-rate 'Buddy' tax in cash and get all the necessary paperwork needed to avoid the higher Mass taxes.
Inquire discreetly at any Rhode Island merchant.
Yep, I live in Washington, and in Oregon, everything is on sale- ten percent off.
Let them come and get it themselves. I dare them - I double-dare them...
do you people have over there?
Here in Oz, it is written into our constitution that the states are not allowed to tax the movement of goods between states.
Looks like your founding fathers missed that one...
If my call is important, why am I talking to a recording?
In California, a state with one of the HIGHEST costs of living, the highest state tax rate STARTS around $30k and is around 9.6%, iirc. Sales tax is another 8.25%. Gasoline is taxed at around 35% per gallon. Add to that an approximate 6% payroll tax (FICA), 35%+income tax and assorted taxes on "services", taxes eat up over 50% of my income. This doesn't take in to account property tax, either.
Someone making $25k/year with 4 or 5 dependants probably pays next to nothing in income tax (state or federal) -- and in fact, probably MAKES money in the form of an EIC (earned income tax credit -- a "refund" on taxes that were NEVER paid).
I can tell you in California, $200k/year is NOT anything CLOSE to rich. With rent of a 3 bedroom apt running over $2k/month and over in many cities and houses in decent neighborhoods running about $500k and up, $200k/year is solidly middle-class in CA.
If one REALLY doesn't "want a burden", maybe they shouldn't be having 4 or 5 kids -- particularly at $25/year... Just an idea...
I would wager that the Interstate Highway Act had a bigger impact on reliable and safe highways.
I didn't report any purchases from the Internet. And I live in California. My tax accountant didn't even mention it, so I'm not too worried about it.
It's All Politics
Of course, some places will still want you to pay the difference, but it might help in some places.
All states have use tax (read the article). The only part that's new is having a line on the tax return.
Expect the Feds to eventually mandate a central clearing house of ALL sales regardless of type, so that the states can take a peek at what you are buying, calculate the tax owed, then bill you . ( or charge you with tax evasion if you put nothing down at all )
.. not if they claim its for national security, to determine potential terrorist activities by what combinations of items people are purchasing...
"But that would be illegal"
Good thing I mostly use real cash.. at least until they start tagging that too....
---- Booth was a patriot ----
Where does it say that?
For fucks sake. Carnivore is a SNIFFER and an analysis GUI!
Nothing more. It is a damn tool, and you people keep treating it as if it were some armed robot.
Damn you paranoid fucks.
Try living in europe... where I live sales tax is 19%. Remember in the US you pay the least tax of any developed nation.
No No No, Social Security just screws Gen X to the benefit of the baby boomers. They will suck the program dry just about the time we should be getting our payments out of it. So your statement that it screws us all is wrong; just Gen X gets screwed. Gen Y will have paid very little into the system by the time it fails so they will have no appreciable stake. Isn't tyranny of the majority great?
andy
Oklahoma is one of them. If you order something and don't pay sales tx you are supposed to pay use tax. Oklahoma even refuses to have a "tax holiday" At the begining of the school year, like Texas. So every year their are news stories about whether or not it's worth it to spend the gas to drive to Texas, just avoid paying tax on School clothes. Many people seem to think so. Maybe it is if they buy enough and live close enough to the state line
You call it Taxachussetts and you don't pay taxes on Food and clothing?
Oklahoma taxes everything except what you buy on indian land, which is where most smokers buy there cigarettes.
The concept of sales tax is ridiculous in itself.
Why do we pay taxes ? To fund services provided by the government.
What service is provided by gov't when I go pick up a 61" Plasma TV for 9999$ that justifies blowing another 1100$ in taxes ? NOTHING!
Property tax is reasonable (water/police/firemen), driver's license is another honest tax (to pay for road maintenance). Income tax is kind of fishy since gov't has little to do with my work and employer, but it is one way of taxing somewhat fairly across working classes. Now to be 100% fair they should get rid of the indexing/bracketing and just charge a fixed percentage for everyone.
Sales tax ? Why should we pay the state/country for someone else's product and labor ? Because they will hunt us down and lock us up if we don't ? That's no good reason, that's racketeering no better than the mob.
[soapbox ON]
The only reason such excess funds are required is because gov't is grossly inefficient and corrupt. It's all been said before, but the main problem is that gov't is getting special treatment. The truth of it is that it should be no different from any other private company. If you put an owner on top, someone whose wealth is in the hands of the company, then suddenly you will see efficiency improve tenfold, but when you're spending other people's money you really don't care if you're being overcharged for this or whether such-and-such project is bullshit.
[soapbox OFF]
The bottom line: taxes suck. =)
-Billco, Fnarg.com
Yep, its a lovely feeling knowing you'll never be able to aford a house as nice as the one you grew up in.
Religion is a gateway psychosis. -- Dave Foley
try supporting a family of 4 or 5
Sounds like somebody needs to practice pulling out...
Amendment X
"The powers not delegated to the United States [i.e. the Federal government] by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."
Pope Felix the Scurrilous.
Computer Geek by day, religious Icon by night.
A lot of states rely on an outdated revenue model - taxing sales of goods within their borders.
With the growth of businesses like amazon.com, Indian tribal casinos, etc. they're just not raising as much revenue this way as in the past.
Consequently, most states in the last several years have been looking at looming budget shortfalls.
Gross receipts tax revenues are going to have to be replaced by something else, be it income tax, property tax, use taxes (gasoline, alcohol, tobacco).
Otherwise, state services will be cut and we'll end up resembling third world countries in more and more ways.
"Provided by the management for your protection."
Two words for you: September 11. If the FBI/CIA had shared data with the INS, the whole thing might never have happened.
i believe that there is something called the "interstate commerce act" which says basically that a state cannot charge ANY taxes on transactions across state lines.
i guess with so many states doing it, someone figured a way around this federal law.
"No tax or Duty shall be laid on Articles exported from any State."
Now, if the Articles are being imported, they have to have been exported from somewhere. If they are exported Articles, then no tax or Duty shall be laid on them.
If the citation was more like, "No tax or duty shall be laid on the export of articles from any state", then I'd agree with you.
Article 8 "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States."
As others have mentioned before, the first thing that comes to my mind when I read about states doing this is the fact that by law, only the Congress can regulate interstate commerce. If you pay this State tax, you are technically participating in an illegal transaction. With that said, it can be boiled down into which law you want to follow, the federal one that's been through judicial review or the not as old set of laws regarding importation of goods from other states.
"Nature doesn't care how smart you are. You can still be wrong." - Richard Feynman
9% sales tax...ohhh amazing, try the uk or sweden or other places, 17.5% minimum!
Get real people!
Wouldn't the Supreme Court have a pretty easy time hearing and striking down that case? Hell, if your argument is so obvious, wouldn't the other courts do it for them?
p.s. what happened to your reply to my post? You said you'd take your time, but I didn't expect it to take this long... or maybe that was just a face saving statement?
BMetzler in touch with the real world?
Don't hold your breath >:)
Nice work. You've successfully refuted an argument which wasn't even presented! It is well settled that the Sixteenth Amendment was ratified, but that's not the argument the grandparent post was making. The grandparent post never suggested that the Sixteenth Amendment was not properly ratified. On the contrary, it clearly assumes that the amendment is valid. The argument raised is one of interpretation, not ratification -- that the Sixteenth Amendment does not permit the government to impose the personal income taxes most of us pay, based on a reading of the 1916 and 1911 Supreme Court cases. This argument may be dubious, but it's novel. Address this argument, if you will; debunking another argument is a nonsequitur, not a response.
Personally, I doubt the argument could survive Supreme Court review today, even assuming the reasoning is correct and valid. Perhaps the argument could have swayed the Court in 1916, when income taxes were new and controversial, but now they're accepted as a necessary evil. Historical precedent would force the Court to come up with a rationale to justify the status quo, much as they did with the Eldred case, where the right answer was obvious (don't allow retroactive copyright extensions), but there were decades of previous extensions that went unchallenged. If the first retroactive extension had been challenged, the Court no doubt would have invalidated it and established a rule against retroactive extension of copyrights. Now, it's too late -- they didn't want to rock the boat that much after so many years.
The copyright argument was very persuasive, yet it failed. The Federal government relies heavily on income taxes, and has for most of the last century. The Court literally could not afford to bankrupt the government by invalidating the income tax system after all this time, no matter how persuasive the argument may be. (And I'm not convinced this is a persuasive argument.)
Still, I hope you try again to refute it. I'm curious about this argument, since I've never heard it before, and I have no idea if there's any reasonable basis for it or not. But I doubt there's much chance of success for this argument, even if we assume the reasoning is sound, because the consequences to the government would be too severe. (Anyone who volunteers to be a test case for this is a fool!)
Deven
"Simple things should be simple, and complex things should be possible." - Alan Kay
I find it funny that you would answer minor criticisms such as the grandparent, but not a lengthy one such as this post.
And I find it funny that you've posted twice about that post without noticing that the argument it debunked was not the argument that Loki_1929 presented! All the case law presented makes that post look like a comprehensive refutation of the argument, when in fact it's entirely nonresponsive. (The argument was about interpretation, not ratification!)
Deven
"Simple things should be simple, and complex things should be possible." - Alan Kay
Because their government has threatened them with lengthy jail terms if they refuse. I believe I'm right, but I continue to pay my taxes. Why? Because I cannot afford to be wrong.
Therein lies the Catch-22. Nobody who can afford to make the case can afford to lose the case. So nobody makes the challenge, and eventually, it's too late for the argument to have a chance to persuade the Court. As I said before, the Court can't afford to bankrupt the government by invalidating income taxes, so they would be forced to devise a rationale (even a tortured one) to maintain the status quo.
Of course, you could pay your taxes (satisfying your legal obligation and avoiding any threat of jail time) and then make the case that the taxes should be refunded to you, based on this argument -- if you can afford to press the case. Unfortunately, it's probably too late for that in practice -- you'd probably be laughed out of court and "randomly" audited by the IRS for the rest of your life...
Deven
"Simple things should be simple, and complex things should be possible." - Alan Kay
My criticism is not minor, it is a critical blow to his argument. If the Supreme Court really did say that income tax is unconstitutional, they why would the people most familiar with those rulings, and with the best access to the court not change their behavior. If they don't have to pay the taxes, then there is no punishment waiting for them, they would just stop. Presumably, there would be no legal fees for them either (they are more than capable of defending them selves).
I don't see the "critical blow" here. I doubt Supreme Court justices are the type to engage in civil disobediance in the first place -- they probably wouldn't be confirmed if they were. And if they did, they open themselves up to possible impeachment -- who wants to lose a job with guaranteed tenure for life? Besides, these are different justices than the ones who wrote those opinions.
Let's suppose for the sake of argument that his reasoning is valid, that the 1916 and 1911 opinions, taken together, lead to a logical and necessary conclusion that most personal income taxes are actually unconstitutional. Even if the logic is inescapable, it might be novel and nonobvious, even to the justices who wrote those opinions, who may not have thought of that argument. Perhaps if the argument had been made to the Court soon after the 1916 decision, they might have found it persuasive. We'll never know.
The fact that Supreme Courty justices pay their taxes doesn't prove that the argument is invalid.
However, the current justices grew up with the income tax as a fact of life, accepted as a necessary evil. They are also astute enough to realize what the ramifications would be if nearly a century of income taxes (many trillions of dollars) were to be declared unconstitutional. There's not a snowball's chance in hell they'll bankrupt the government by invalidating the income tax now, especially retroactively.
To win the case now would require not only a compelling argument (which I'm not convinced this is), but also a means to mitigate the impact of such a decision. I just don't see it happening...
Deven
"Simple things should be simple, and complex things should be possible." - Alan Kay
BEGIN failed--compilation aborted at -e line 1.
Oh well, I tried.
sic transit gloria mundi
I can see it now - Alabama the latest member of the EU!
"Now Y'all say that there's this here VEE AY TEE - now WHUT sort uv tax is THAYAT?"
hee hee