Days numbered for tax-free Net sales

[Trumplestiltskin 5,791]

they only estimate a 1-5% of people will fill in anything other than zero, but at least they get some revenue back!

Why should NY state get any revenue for the things I bought from other states?

What did they do to deserve the money?

I guess they figure they're losing out on the sale... but still... I'm not sure I like the idea of being (effectively) penalised for shopping out of state. Even so, it doesn't really make sense why WA can't claim sales tax on Amazon sales for example (although I imagine their tax revenue would skyrocket if that were the case).

There's also that other thing that few people know about - that you're supposed to declare your last years tax refund as part of your next year's income.

[mawilson 2,133]

There's also that other thing that few people know about - that you're supposed to declare your last years tax refund as part of your next year's income.

Not unless you use itemised deductions.

[Dr_LHA 3]

The point is that you're supposed to pay sales tax on everything you buy. The loophole exists because you're supposed to pay local sales tax on items, so if you buy from out of state, you're supposed to pay the sales tax to your local state rather than the state you buy from. Because businesses can't be dealing with taxing you at your local rate then dealing with 50 different states when accounting for the sales tax they charge, its easier for them to not charge sales tax at all and put the burden on the purchaser to meet the sales tax payment requirement.

Clearly nobody does this, so by forcing retailors to tax everyone, although the taxes are going to the wrong state, it evens out roughly in the end. Or at least, every state gets more sales tax than they currently do.

I haven't read the plan in detail, perhaps the collected sales tax gets dished out correctly between the states?

There's also that other thing that few people know about - that you're supposed to declare your last years tax refund as part of your next year's income.

Not unless you use itemised deductions.

Correct.

[Scott & Lai 12]

There's also that other thing that few people know about - that you're supposed to declare your last years tax refund as part of your next year's income.

That one makes no sense to me. The reason you get a refund is you paid too much tax that year. You're simply getting back the money for that year that shouldn't have gone to the government in the first place. So why does that get counted as income for the next year?

[mawilson 2,133]

There's also that other thing that few people know about - that you're supposed to declare your last years tax refund as part of your next year's income.

That one makes no sense to me. The reason you get a refund is you paid too much tax that year. You're simply getting back the money for that year that shouldn't have gone to the government in the first place. So why does that get counted as income for the next year?

Only state tax refunds count as income for federal tax purposes, and only if you

itemised your deductions. This is because you can deduct the state taxes on your federal

tax return when you itemise, so any amount refunded to you by state this year is technically

the amount you underreported on your last year's federal tax return.

Does that make any sense to you?

[Trumplestiltskin 5,791]

There's also that other thing that few people know about - that you're supposed to declare your last years tax refund as part of your next year's income.

That one makes no sense to me. The reason you get a refund is you paid too much tax that year. You're simply getting back the money for that year that shouldn't have gone to the government in the first place. So why does that get counted as income for the next year?

Only state tax refunds count as income for federal tax purposes, and only if you

itemised your deductions. This is because you can deduct the state taxes on your federal

tax return when you itemise, so any amount refunded to you by state this year is technically

the amount you underreported on your last year's federal tax return.

Does that make any sense to you?

It makes sense - but they (IRS) don't seem to follow up on it - or the "tax-free" internet shopping.

[mawilson 2,133]

It makes sense - but they (IRS) don't seem to follow up on it - or the "tax-free" internet shopping.

Only because they have no idea how much money (if any) you got back from the state.

[Ban Hammer 14,569]

It makes sense - but they (IRS) don't seem to follow up on it - or the "tax-free" internet shopping.

Only because they have no idea how much money (if any) you got back from the state.

not exactly true - kansas, at least, sends out a tax refund form that is supposed to be filed with the next year's income tax.

[mawilson 2,133]

I should "move" - *cough cough* - to a tax free state, such as New Hampshire.

[Dr_LHA 3]

It makes sense - but they (IRS) don't seem to follow up on it - or the "tax-free" internet shopping.

Just to be annoyingly pedantic, the IRS has nothing to do with "tax-free" internet shopping, because that's a sales tax issue, with is governed by the individual states, not the IRS.

[mawilson 2,133]

It makes sense - but they (IRS) don't seem to follow up on it - or the "tax-free" internet shopping.

Just to be annoyingly pedantic, the IRS has nothing to do with "tax-free" internet shopping, because that's a sales tax issue, with is governed by the individual states, not the IRS.

Yes.... I forgot to mention it, but I knew someone would point it out.

[Widge 0]

It has always seemed to me ludicrous that there is no sales tax if I buy out of state online, something I do frequently as I buy 90% of gifts online plus other stuff. Effectively you are penalising the in-state store/retailer who has to (effectively) raise his bottom line price (which is all the buyer really cares about) to sell to his in-state customer> What better wa y to encourage your shoppers to go out of town/state! Online stores already have the advantage of no high street retailer taxes they dont need more help. The actual collection is a mere adjustment to a line of software and the revenue raised by effectively levelling hte playing field might actually reduce taxes at other sources!