Search This Blog

Wednesday, August 22, 2007

Tax Free Internet Purchases?

Hey,

My wife asked me a question today about “TAX FREE INTERNET PURCHASES”.

I really hadn’t thought much about not paying sales tax on something I purchased.

Didn’t matter to me where I bought that something; I just assumed that somebody was going to pay the taxes!

But when my wife said that she was told that you didn’t have to pay sales taxes on anything you purchased on the internet….You know me…. I started digging and this is what I found so far.

If you made a purchase on the internet and you didn’t pay sales tax you cheated on your taxes!

And you probably didn't even know it.

Nevertheless, if your state collects sales taxes, technically you are responsible for paying any unpaid sales tax to your state for any online purchase you may have made. I hope you have kept all those receipts!!!! Talk about a headache!!!!

Alaska, Delaware, Montana, New Hampshire, and Oregon are the only states that don’t have sales tax.

Forty Two (42) States and the District of Columbia (South Carolina is one of them) are hard at work to end the so-called “sales tax free internet” through a collaborative effort to change their tax codes thereby making it easier for the Federal Government to enact the necessary legislation. That means that we will be paying sales taxes on internet purchases in the foreseeable future.

I understand that South Carolina is in compliance with The Streamlined Sales Tax Governing Board.

The Streamlined Sales Tax Project is an effort created by state governments, with input from local governments and the private sector, to simplify and modernize sales and use tax collection and administration. The Project’s proposals include tax law simplifications, more efficient administrative procedures, and emerging technologies to substantially reduce the burden of tax collection. The Project’s proposals are focused on improving sales and use tax administration systems for both Main Street and remote sellers for all types of commerce. Forty-two states and the District of Columbia are involved in the Project. Forty five states and the District of Columbia impose sales and use tax. LINK

Are we all going to jail? Do we have any lawyers out there who can clear this up a bit?

Here’s the skinny:



Sales Tax on the Internet: Who Pays It, Who Doesn't LINK

by Attorney Richard Stim

The Internet takes tax-free shopping to a new level. In fact, no-tax shopping has become a prime lure of online retailers looking to hook consumers on click-and-charge buying. Despite what you sometimes hear, however, some Internet sales are subject to sales tax, and even when a site doesn't collect sales tax, consumers are technically responsible for remitting any unpaid sales tax on online purchases directly to their state.

Collecting Sales Tax: Some Sites Have To, Some Don't

If an online retailer has a physical presence in a particular state, such as a store, business office, or warehouse, it must collect sales tax from customers in that state. If a business does not have a physical presence in a state, it is not required to collect sales tax for sales into that state. This rule is derived from a 1992 Supreme Court decision which held that mail-order merchants did not need to collect sales taxes for sales into states where they did not have a physical presence.

EXAMPLE

Margo is passionate about rare orchids but can't find them in Indiana, so she orders her supplies online from an orchid supplier with headquarters in Vermont. The supplier has all of its facilities in Vermont and collects payment in Vermont. Margo does not have to pay Indiana sales tax (or Vermont sales tax) on her orchids.
A few months later, the supplier opens a warehouse in Indiana to handle its online orders for the entire country. Margo continues to order her orchids from the headquarters in Vermont but she must now pay Indiana sales tax. Her ride on the tax-free train is over.


For a while, some big retailers with local stores sold their products tax-free over the Internet by creating separate legal subsidiaries to handle Internet business. However, lawsuits by several states and pressure from the Streamlined Sales Tax Project (a group created by states supporting the Streamlined Sales & Use Tax Agreement, discussed below) has ended that practice of avoiding sales taxes.

Consumers' Responsibility to Pay Sales or Use Taxes

Consumers who live in a state that collects sales tax are technically required to pay the tax to the state even when an Internet retailer doesn't collect it. When consumers are required to pay tax directly to the state, it is referred to as "use" tax rather than sales tax.

The only difference between sales and use tax is which person -- the seller or the buyer -- pays the state. Theoretically, use taxes are just a backup plan to make sure that the state collects revenue on every taxable item that is purchased within its borders. But because collecting use tax on smaller purchases is so much trouble, states have traditionally attempted to collect a use tax only on big-ticket items that require licenses, such as cars and boats.

That, however, may be changing. Many states have reevaluated their attitude towards collecting use taxes. For example, New York State has added a line to income tax returns requiring all residents to calculate how much they should pay on Internet, mail order, or out-of-state purchases. California has begun a campaign to educate taxpayers on what's owed, as well. Watch for more states to step up use tax collections.

The Internet's Future as a Tax-Free Zone

Will Internet purchases remain free from sales-tax? We'll find out in coming years as Congress and state legislatures wrestle with this issue. Naturally, there is a great deal of opposition to the current approach, and state governments and brick-and-mortar retailers are seeking legislation to overturn the 1992 Supreme Court ruling. A look at the numbers explains why. Sales tax revenues currently amount to about $150 billion annually and make up approximately one-third of all state revenues. These taxes pay for everything from schools and police to roads, parks, and other state services. California, alone, estimates losses of over a billion dollars per year in sales tax revenues.

States that don't have a personal income tax, like Texas, are even more dependent on sales tax revenue. (The five states that don't have a sales tax -- Alaska, Delaware, Montana, New Hampshire, and Oregon -- aren't hurt at all.)

Streamlined Sales & Use Tax Project

In 2002, state governments organized to fight back. Under a state-led initiative known as the Streamlined Sales & Use Tax Agreement (SSUTA), 40 states and the District of Columbia banded together to simplify their sales tax codes in order to make sales tax collection easier. Under SSUTA, the collection of sales tax still remains voluntary. However, it is considered a necessary stepping stone to federal legislation.

The SSUTA has gained traction. Several national retailers have negotiated with member states for amnesty deals in return for future collection of sales tax, and more are expected to follow. In addition, several states have already amended their tax laws to conform to the SSUTA. With all of this pressure from states, many experts believe that within the next few years you'll be throwing a few more dollars into your shopping cart for state sales taxes.

Participating States

Alabama Arizona Arkansas California Connecticut District of Columbia Florida Georgia Hawaii Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Nebraska New Jersey New Mexico New York Nevada North Carolina North Dakota Ohio Oklahoma Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

More Information About Internet Sales Tax
• E-fairness (www.e-fairness.org) represents retailer organizations lobbying Congress for equal taxation.
• The Sales Tax Institute (www.salestaxinstitute.com) provides a range of services and links associated with sales tax.
• The Streamlined Sales Tax Governing Board (http://www.streamlinedsalestax.org) maintains a website detailing the organization's progress.
• Amnesty http://www.streamlinedsalestax.org/amnesty.html
• South Carolina 2002/ SB 852 (Act 334): legislation makes South Carolina an implementing state. http://www.scstatehouse.net/sess114_2001-2002/bills/852.doc

Saturday, August 11, 2007

Pay Attention Lee County Natives Those Revenuers Are At It Again!

Editors note: Click on the title above to go to the AARP bulletin containing the following article.

What an Outrage!

The IRS Phone Runaround
By Michelle Diament

July-August 2007


Identity thieves are everywhere, so if a mysterious caller asked for your name, Social Security number and address, red flags would go up. But here's a new twist: That caller might be a contractor for the Internal Revenue Service.

The federal agency is outsourcing collection of delinquent taxes—but at first you wouldn't know the IRS is behind a call because the debt collectors are instructed to say only that they are inquiring about "a personal business matter." Only after the individual verifies personal information is the reason for the call revealed.

Further, the private collectors are targeting low- and middle-income taxpayers—many of whom don't owe a dime.

Now Congress is getting involved. At a recent House Ways and Means Committee hearing, Rep. John Lewis, D-Ga., said the calls amount to "harassment, confusion and violations of taxpayer protections."

Many of the people contacted refused to disclose personal information, and the companies often continued to call them—repeatedly.

Kevin Brown, acting IRS commissioner, says the private companies have collected more than $19 million and insists that surveys show most taxpayers are satisfied with the collection agencies.

The companies sure aren't complaining. They get to keep 25 percent of everything they collect.

Wednesday, August 08, 2007

Dreamy Lunar Eclipse


Editors Note: Many of you may have received an e-mail that claims you will be able to see two moons on August 27. It will not happen. Copy and paste this site

http://urbanlegends.about.com/library/bl_mars_encounter_2006.htm

to your browser.

However you can click on the title above to go to Science@NASA and learn about a REAL partial eclipse.


August 3, 2007: Close your eyes, breathe deeply, let your mind wander to a distant seashore: It's late in the day, and the western sun is sinking into the glittering waves. At your feet, damp sand reflects the twilight, while overhead, the deep blue sky fades into a cloudy mélange of sunset copper and gold, so vivid it almost takes your breath away.
A breeze touches the back of your neck, and you turn to see a pale full Moon rising into the night. Hmmm. The Moon could use a dash more color. You reach out, grab a handful of sunset, and drape the Moon with phantasmic light. Much better.
Too bad it's only a dream...
Early Tuesday morning, August 28th, the dream will come true. There's going to be a colorful lunar eclipse visible from five continents including most of North America: map.
Right: Photos of the March 3, 2007, lunar eclipse. Credit: Antonio Finazzi and Michele Festa of Lago di Garda, Italy. [Larger image]
The event begins 54 minutes past midnight PDT (0754 UT) on August 28th when the Moon enters Earth's shadow. At first, there's little change. The outskirts of Earth's shadow are as pale as the Moon itself; an onlooker might not even realize anything is happening. But as the Moon penetrates deeper, a startling metamorphosis occurs. Around 2:52 am PDT (0952 UT), the color of the Moon changes from moondust-gray to sunset-red. This is totality, and it lasts for 90 minutes.
To understand why the change occurs, close your eyes and dream yourself all the way to the Moon. Once again, you're standing on a seashore—the Sea of Tranquillity. There's no water. You're surrounded by hundreds of miles of dusty, hardened lava. Overhead hangs Earth, nightside down, completely hiding the Sun behind it. The eclipse is underway.
With the Sun blocked, you might expect utter darkness, but no, the ground at your feet is aglow. Why? Look back up at Earth. The rim of the planet seems to be on fire. Around Earth's circumference you see every sunrise and sunset in the world—all at once. This incredible light beams into the heart of Earth's shadow, transforming the Moon into a landscape of copper moondust and golden hills.
Wake up! This is really going to happen, and some planning is necessary. Start times of totality are listed in the table below. Set your alarm an hour or so in advance to gather snacks and dress warmly. (Even in August, four o'clock in the morning can be chilly.) Waking up early also allows you to catch some of the partial eclipse before totality.

The eclipse will be visible from Australia, Japan, parts of Asia and most of the Americas, but not from Africa or Europe. Pacific observers are favored. On the west coast of the United States, the entire eclipse will unfold high in the post-midnight sky. On the east coast, totality will be truncated by sunrise. That's okay; even a little eclipse can be a dream.
SEND THIS STORY TO A FRIEND
Author: Dr. Tony Phillips | Editor: Dr. Tony Phillips | Credit: Science@NASA

Saturday, August 04, 2007

Trivia Question for August ‘07


How many counties border Lee County?

a. ONE
b. TWO
c. THREE
d. FOUR
e. FIVE
f. SIX OR MORE

Use the comment section to record your answer.

August Birthdays

John Patterson's birthday is on the 12th

Val Green's Birthday is on the 13th

Charlie King's Birthday is on the 19th


To get your 'special' day listed just drop me an e-mail

johnreames@sc.rr.com

Word of the Day

Snap Shots

Get Free Shots from Snap.com