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Discussion Starter · #1 ·
I've noted this before deep in another thread, and here's more on the frequently unknown and overlooked obligation of online purchasers to pay sales (use) tax. Internet purchases are not "free" of sales taxes, they just make it easy and relatively safe to "evade" sales taxes. Note the example about the HDTV purchase!

http://cbs.marketwatch.com/news/stor...4B745F33E14%7D
 

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Discussion Starter · #3 ·
HMMMM--didn't work again.--well, in brief the article discussed how the TYCO chief got nailed for shipping the artwork into New Hampshire, a no sales tax state, and then bringing it in to New York. It noted how the states do go after the real big ticket offenders, but don't have the resources to enforce collection of sales taxes on online and mailorder purchases of their residents. Gave the example of an online HDTV purchase.
 

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ugyvel-


The trick to posting URL links is that you cannot edit it during typing, you must type it correctly all the through. Or cut and paste from elsewhere.
 

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Discussion Starter · #6 ·
Well, if you try the link this afternoon, it will get you to CBS marketwatch, and say page not found. Go the main news page, go about halfway down and the headline is there "Nailing the Rich".


This is assuming someone cares!
 

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I think you will find that one state cannot tax business conducted in another state for Constitutional reasons (Commerce Clause). Many states have tax code provisions for personal property taxes, but cannot selectively enforce them, whether the item is high cost or not. They almost always tax only business property, and then uniformly. If the state taxes all personal property; look for another state in which to reside.


The Tyco exec ran into trouble, not because he shipped to New Hampshire, but because he did not, and used the pretext of doing so as a ruse, while the art was bought in New York for use in New York, which NY can properly tax.


My understanding is that if the purchase is truly interstate with no joint locus in the taxing state, then sales taxes cannot be levied. Quit worrying.
 

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As ugyvel stated - use tax is on the books here in Texas, too. Luckily we don't have any state income tax, here with which to have to declare such things.


Bruce
 

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Brucer, although here in Austin our school and property taxes are so high that we're above the median in state tax burden, even with no state income tax!
 

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Bill-


That's interesting - I don't know where Dallas co. stands, relative. I vaguely remember 1-3/4% or so, but not sure that included all of 'em. But at least it is based on Prop. values and not income (at least not directly).


You think you're having to support the gov. network there?


We also have the 8.25% sale tax in the mass transit zones (suburbs that support it).


Bruce
 

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Discussion Starter · #11 ·
Quote:
Originally posted by Distorted
I think you will find that one state cannot tax business conducted in another state for Constitutional reasons (Commerce Clause). Many states have tax code provisions for personal property taxes, but cannot selectively enforce them, whether the item is high cost or not. They almost always tax only business property, and then uniformly. If the state taxes all personal property; look for another state in which to reside.


The Tyco exec ran into trouble, not because he shipped to New Hampshire, but because he did not, and used the pretext of doing so as a ruse, while the art was bought in New York for use in New York, which NY can properly tax.


My understanding is that if the purchase is truly interstate with no joint locus in the taxing state, then sales taxes cannot be levied. Quit worrying.
Yours is precisely the misconception that most people have about interstate sales.


Yes, the state in which the retailer is located cannot tax the sale to an out of state customer. And yes, the state in which the customer cannot tax the retailer on the sale (unless the retailer has a "presence" in the state). BUT, the state in which the customer resides can, and most all do, tax the customer on property purchased out of state and brought into the state! This the the "use" tax. Most common 'enforced' example (because they have a means to do it) is if you go across the state line to buy a car, you will have to pay your state the 'use' tax before you can title your car in your state.


Again, the use tax is usually not actively enforced, but the liability is there!
 

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Sales tax is definitely due in the state of Texas! So if you purchase those DVD's (or plasma) over the internet and don't pay sales tax, then you are in violation of the law.


The only legally valid way to avoid sales tax is if you are not the end user or if it is a non-taxable item. (like unprepared food items)


I'm not aware of anyone, including myself, who has paid sales tax if not actively collected by the seller or the state as in the car purchase example.


I enjoy pointing this out to people who like to think they are above breaking even the tiniest law. They usually pretend they don't understand or that I am mistaken.


Ken
 

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I am not saying you are wrong, Kenland, because my ignorance of tax matters is great, but can you cite the relavant Texas tax statute to which you refer. I always prefer to know what laws I am breaking.


One should always remember Steve Martin's famous "two little words" that can get you out of any tax scrape - "I Forgot."
 
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