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States Are Getting Aggressive About Collecting Use Tax

gbesq
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So I received a notice of potential use tax owed today via mail from my friendly state department of revenue. The watch in queston was ordered from a seller in Japan and imported into the U.S. Funny thing is, the purchase was made through eBay and eBay collected sales tax on the purchase as they normally do. I'm fine with paying any tax owed, as I should be, but the letter required me to upload documentation showing that tax was paid. I uploaded the sales receipt showing that sales tax was charged because that's all I have. I hope that I don't have to get eBay involved to prove that they collected and remitted the sales tax to my state. I understand that states need revenue to operate, and I don't mind paying my fair share, but there was something a bit troubling about receving a notice stating that use tax might be owed and asking ME to show my state department of revenue why no tax is due. To be fair, I suppose that it's more difficult for them to track purchases imported from out of the country as opposed to a local retailer charging me sales tax on an in state purchase, but I can't help but wonder how many taxpayers just roll over and pay the use tax requested in the notice when they have already paid sales tax to the seller on the same purchase.
Edited:
 
Evitzee
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Many states are desperate for revenue as they can't print money like the Federal government can, so they have to balance revenue and spending. It is troubling that eBay is now sharing sales data with state governments who will just blow out these notices and hope people will just send money in. And it's up to YOU to prove that you paid it. eBay knows every order where sales tax was collected, you would think they could filter out those sales from the data they send to the state revenue offices. Perhaps it's just easier for them to give all sales data to the state governments, i.e., the lazy way out.
 
gatorcpa
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Evitzee Evitzee
eBay knows every order where sales tax was collected, you would think they could filter out those sales from the data they send to the state revenue offices. Perhaps it's just easier for them to give all sales data to the state governments, i.e., the lazy way out.
I don’t think it was eBay in this case. US Customs routinely shares information with state sales tax authorities. Customs has no clue if eBay collected state sales tax or not.
gatorcpa
 
Evitzee
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gatorcpa gatorcpa
I don’t think it was eBay in this case. US Customs routinely shares information with state sales tax authorities. Customs has no clue if eBay collected state sales tax or not.
gatorcpa
That makes sense. Hopefully uploading the little info you have re. taxes paid will be sufficient to satisfy the revenue people.
 
JwRosenthal
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I think it’s customs sharing info as well. I’ve gotten similar requests at work for goods purchased from overseas through third party vendors but addressed to me. But as they were shipped to a federal office building, purchased by a federal agency- I’m assuming it is auto generated.
 
abrod520
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gbesq gbesq
I uploaded the sales receipt showing that sales tax was charged because that's all I have. I hope that I don't have to get eBay involved to prove that they collected and remitted the sales tax to my state.

When I lived in California, this was enough to prove I'd paid sales tax.

And CA is like a crackhead finding every last grain to rub in their teeth, when it comes to taxing their residents (said as a liberal who believes in paying taxes - at least, in places where you can see the benefit of doing so!)
 
RevZMan123
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Always something with nickle and dimeing the little guys. Such a shame that their efforts are directed at the most taxed groups but allow themselves and big corporations to get away with skirting larger tax revenues.
 
JwRosenthal
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RevZMan123 RevZMan123
Always something with nickle and dimeing the little guys. Such a shame that their efforts are directed at the most taxed groups but allow themselves and big corporations to get away with skirting larger tax revenues.
But how would they afford the tax breaks for those same groups without taxing us? It’s just common sense- somebody has to foot the bill and it sure as shit ain’t gonna be them.
 
Dan S
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Sounds like a huge hassle to be required to document payment of sales tax after the vendor already paid it. Not a very efficient system.
 
gbesq
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Dan S Dan S
Sounds like a huge hassle to be required to document payment of sales tax after the vendor already paid it. Not a very efficient system.
Precisely the kind of overreaching government policies that discourage commerce and, ironically, decrease tax revenue. And I say that as a liberal.
 
Evitzee
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RevZMan123 RevZMan123
Always something with nickle and dimeing the little guys. Such a shame that their efforts are directed at the most taxed groups but allow themselves and big corporations to get away with skirting larger tax revenues.
Taxes paid by corporations, large and small, are ultimately paid by the end customer through higher prices. That's how taxes work.
 
gbesq
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Evitzee Evitzee
Taxes paid by corporations, large and small, are ultimately paid by the end customer through higher prices. That's how taxes work.
And when corporations pay little or no taxes on income, this ostensibly results in higher profits, more retained earnings and more money for shareholders that somehow lowers the tax burden for the rest of us? Color me skeptical …
 
RevZMan123
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Evitzee Evitzee
Taxes paid by corporations, large and small, are ultimately paid by the end customer through higher prices. That's how taxes work.

Taxes are used to take public money and shuffle them to private businesses via our government.
 
gbesq
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RevZMan123 RevZMan123
Taxes are used to take public money and shuffle them to private businesses via our government.
Not entirely. The three largest categories of federal expenditures are entitlements, defense and net interest on the national debt. Entitlements represent, by far, the largest expenditure and the vast majority of that spending benefits individuals, not businesses, although you could argue that businesses benefit indirectly as individuals spend that income. Some private businesses do benefit from defense spending. Interest payments on the national debt benefit no one.
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RevZMan123
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gbesq gbesq
Not entirely. The three largest categories of federal expenditures are entitlements, defense and net interest on the national debt. Entitlements represent, by far, the largest expenditure and the vast majority of that spending benefits individuals, not businesses, although you could argue that businesses benefit indirectly as individuals spend that income. Some private businesses do benefit from defense spending. Interest payments on the national debt benefit no one.

1 out of 3 ain't bad? But even all that vapor money interest is going to debt holders, which are not you, me, mom and pop. It's The Fed (a private business), banks (private businesses), funds (held by private businesses), foreign governments (i mean, still sort of a business), etc.

All defense spending goes to the military industrial complex in one way or another.

Entitlements = money to people ... and where do they spend that money? Like you said, back to private businesses in a sick cycle of everyone getting screwed.
 
gatorcpa
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gbesq gbesq
Interest payments on the national debt benefit no one.
Unless you are holding US Treasury bonds. 😗

Of course, they claw back up to 37% of your yield in taxes.
gatorcpa
 
JwRosenthal
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This always blows my mind- loan us your money- thanks, now we are going to tax that.
 
abrod520
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RevZMan123 RevZMan123
Entitlements = money to people ... and where do they spend that money? Like you said, back to private businesses in a sick cycle of everyone getting screwed.

Those private businesses employ people, who then spend the money they earn from those jobs at other businesses that employ other people, who then spend the money they earn from those jobs etc etc etc.
People spending money at businesses is what powers the economy really, the issue is that the share of that money spent at a business that goes to their employees is shrinking at a ridiculous rate
 
MSNWatch
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gatorcpa gatorcpa
Unless you are holding US Treasury bonds. 😗

Of course, they claw back up to 37% of your yield in taxes.
gatorcpa

That's why high yield munis and high yield dividend stocks are more attractive from a fixed income total return point of view. I always make sure to check the net yield corrected for taxes.
 
gatorcpa
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MSNWatch MSNWatch
That's why high yield munis and high yield dividend stocks are more attractive from a fixed income total return point of view.
No doubt, but yield was not the context of my comment.
gatorcpa
 
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