Comments on: Do You Cheat On Your Taxes? http://thefinancebuff.com/do-you-cheat-on-your-taxes.html like a friend telling you about money ... Fri, 10 Feb 2012 17:31:35 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Wai Yip Tung http://thefinancebuff.com/do-you-cheat-on-your-taxes.html#comment-4191 Wai Yip Tung Tue, 13 Jul 2010 18:11:44 +0000 http://thefinancebuff.com/2010/06/do-you-cheat-on-your-taxes.html#comment-4191 I often bought from Amazon and other online retailers and have the goods ship to me from out of state. The difference in sales tax give them a big edge over local retailers. The government should really crack down on this loop hole as soon as possible. I don't want to pay any extra money. But there is something worst than me paying more tax, that is some people paying tax while other people get away from it. It is totally unfair for Amazon to enjoy this extra price advantage. The government should not make it a difficult choice for me to support local retailers. I often bought from Amazon and other online retailers and have the goods ship to me from out of state. The difference in sales tax give them a big edge over local retailers.

The government should really crack down on this loop hole as soon as possible. I don’t want to pay any extra money. But there is something worst than me paying more tax, that is some people paying tax while other people get away from it. It is totally unfair for Amazon to enjoy this extra price advantage. The government should not make it a difficult choice for me to support local retailers.

]]> By: K3 http://thefinancebuff.com/do-you-cheat-on-your-taxes.html#comment-4165 K3 Sun, 04 Jul 2010 16:34:01 +0000 http://thefinancebuff.com/2010/06/do-you-cheat-on-your-taxes.html#comment-4165 Another point: Technically, if you go across the state line and make a purchase from a brick-n-mortar store, pay 5% sales tax, and bring it back to your state that normally would charge 7% sales tax had you purchased the identical item within the state, you owe the differential 2% as reportable tax for which you're liable. And, no, you don't get a credit on your state income taxes if the %s were reversed in this scenario. Another point: Technically, if you go across the state line and make a purchase from a brick-n-mortar store, pay 5% sales tax, and bring it back to your state that normally would charge 7% sales tax had you purchased the identical item within the state, you owe the differential 2% as reportable tax for which you’re liable. And, no, you don’t get a credit on your state income taxes if the %s were reversed in this scenario.

]]> By: Trace http://thefinancebuff.com/do-you-cheat-on-your-taxes.html#comment-4163 Trace Sat, 03 Jul 2010 20:09:39 +0000 http://thefinancebuff.com/2010/06/do-you-cheat-on-your-taxes.html#comment-4163 "If most people don’t want to pay the use tax, and the states are not getting much revenue from it anyway, should use tax be taken off the books? I think so. The law should reflect citizens’ will, right?" TFB, I think you have a terribly naive view about what the role of government is. Don't worry, your generation will get a wonderful experience of 'the law' reflecting the citizens' will (the question is always which citizen of course) being sandwiched between the Baby Boomer and the Millennial generations. http://www.youtube.com/watch?v=P772Eb63qIY “If most people don’t want to pay the use tax, and the states are not getting much revenue from it anyway, should use tax be taken off the books? I think so. The law should reflect citizens’ will, right?”

TFB, I think you have a terribly naive view about what the role of government is. Don’t worry, your generation will get a wonderful experience of ‘the law’ reflecting the citizens’ will (the question is always which citizen of course) being sandwiched between the Baby Boomer and the Millennial generations.

http://www.youtube.com/watch?v=P772Eb63qIY

]]> By: Pelon http://thefinancebuff.com/do-you-cheat-on-your-taxes.html#comment-4153 Pelon Wed, 30 Jun 2010 00:08:53 +0000 http://thefinancebuff.com/2010/06/do-you-cheat-on-your-taxes.html#comment-4153 I'm a sales tax auditor, so I can vouch for the fact that very few businesses and individuals pay use tax on the items they purchase from outside the state. I would say that at least 90% of my audits include an assessment of use tax that the individual or company failed to self-assess. For the most part, though, this is due to ignorance and not a specific intent to avoid the law. In my state, there is a separate form for self-reporting use tax, so it is easy for people to miss it. People also are confused because they think there is a prohibition against tax on anything having to do with the internet. Businesses are the primary target of use tax audits, but individuals aren't immune from getting picked. Different government agencies share a lot of information these days, and computers make it easier to sort through the data and find people who aren't paying. We haven't gotten to the point where purchasing a few items from Amazon will trigger an audit, but if you are buying large dollar items, chances are that you will eventually get a letter asking you to explain why you didn't pay tax on them. The problem with eliminating the use tax is that it puts local businesses at a competitive disadvantage. Having to essentially pay the 5 - 10% sales tax out of pocket to remain competitive could easily force a business to close. If you eliminate the use tax, you really need to eliminate the sales tax as well. I’m a sales tax auditor, so I can vouch for the fact that very few businesses and individuals pay use tax on the items they purchase from outside the state. I would say that at least 90% of my audits include an assessment of use tax that the individual or company failed to self-assess. For the most part, though, this is due to ignorance and not a specific intent to avoid the law. In my state, there is a separate form for self-reporting use tax, so it is easy for people to miss it. People also are confused because they think there is a prohibition against tax on anything having to do with the internet.

Businesses are the primary target of use tax audits, but individuals aren’t immune from getting picked. Different government agencies share a lot of information these days, and computers make it easier to sort through the data and find people who aren’t paying. We haven’t gotten to the point where purchasing a few items from Amazon will trigger an audit, but if you are buying large dollar items, chances are that you will eventually get a letter asking you to explain why you didn’t pay tax on them.

The problem with eliminating the use tax is that it puts local businesses at a competitive disadvantage. Having to essentially pay the 5 – 10% sales tax out of pocket to remain competitive could easily force a business to close. If you eliminate the use tax, you really need to eliminate the sales tax as well.

]]> By: Evan http://thefinancebuff.com/do-you-cheat-on-your-taxes.html#comment-4152 Evan Tue, 29 Jun 2010 23:33:05 +0000 http://thefinancebuff.com/2010/06/do-you-cheat-on-your-taxes.html#comment-4152 North Carolina has one of these use tax laws and has a specific line item on the annual tax return for reporting it. In tax update classes I have attended in the past where state tax officials presented data, it was reported that the amount of returns including additional use tax was around 5%. I buy next to nothing online, so it matters little to me either way, but I agree the laws should be repealed when you have so little compliance. It also illustrates how critical employer tax withholding is for our current system. Without mandatory withholding of income taxes, you'd likely have high rate of non-compliance on income tax as well. And frankly, I think it would be a good idea. Ending withholding so people could more clearly be aware of what their annual tax cost was might just make people more critical of the roll and cost of government. North Carolina has one of these use tax laws and has a specific line item on the annual tax return for reporting it. In tax update classes I have attended in the past where state tax officials presented data, it was reported that the amount of returns including additional use tax was around 5%.

I buy next to nothing online, so it matters little to me either way, but I agree the laws should be repealed when you have so little compliance.

It also illustrates how critical employer tax withholding is for our current system. Without mandatory withholding of income taxes, you’d likely have high rate of non-compliance on income tax as well. And frankly, I think it would be a good idea. Ending withholding so people could more clearly be aware of what their annual tax cost was might just make people more critical of the roll and cost of government.

]]> By: Aaron http://thefinancebuff.com/do-you-cheat-on-your-taxes.html#comment-4147 Aaron Fri, 25 Jun 2010 20:40:59 +0000 http://thefinancebuff.com/2010/06/do-you-cheat-on-your-taxes.html#comment-4147 I actually keep records and pay the use tax as accurately as I can. No one else I know does this, and my friends actually make fun of me for it. I do it because it's the law, even though I think it's a terrible law that can be used to go after almost anyone for tax evasion. I actually keep records and pay the use tax as accurately as I can. No one else I know does this, and my friends actually make fun of me for it. I do it because it’s the law, even though I think it’s a terrible law that can be used to go after almost anyone for tax evasion.

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