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Taking Care of Business
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Old February 14th, 2006, 06:15 PM   #16
Join Date: Dec 2002
Location: Mays Landing, NJ
Posts: 11,463
Two years ago they started including a box on NJ income tax returns for you to declare out of state purchases. Along with this introduction there was a paragraph explaining the tax, and saying that they had ways to catch you if you failed to voluntarily pay. Now I don't know if this was an idle threat, but it isn't too inconceivable that they could buy customer lists from out of state businesses.

I bet you will be surprised to find how many states have something like this if you do some Googling. For example - New York State is another one you can cross off your relocation list :-)

1. Deliveries into New York State ? You owe state and local sales or
use tax if you:

• purchase property or a service that is delivered to you in New
York State without payment of New York State and local tax to
the seller, such as through the Internet, by catalog, from
television shopping channels, or on an Indian reservation.

2. Purchases outside New York State with subsequent use in New
York State ? You may also owe state and local sales or use tax if
you are a resident of New York State at the time you purchase any
of the following outside New York State:

• property you bring into New York State for use in New York

• a service performed on property outside New York State and
you bring that property into New York State for use here; or

• a service (such as an information service) you bring into
New York State for use here.
How about Pennsylvania?

Use Tax is the companion tax to Sales Tax, and is owed when Sales Tax has not been charged on a taxable purchase or service. Many business owners are not aware that Use Tax may be due when purchases are made from an out-of-state business not registered to collect and remit Pennsylvania Sales Tax. Without Use Tax compliance, Pennsylvania-based businesses face a competitive disadvantage to out of-state businesses. As Pennsylvania customers increasingly purchase items from out-of-state businesses, either over the Internet or through other mail order operations, the Department must ensure that the appropriate taxes are collected.
But beyond that, there the "Streamlined Sales Tax Program," which is a cooperative effort between most of the states to centralize tax collection for items bought outside the resident's state

While current law does not require e-commerce and direct mail companies to collect and remit sales taxes on transactions that occur in jurisdictions where they do not have a physical presence, many expect some of these companies may come forward and volunteer to collect taxes under the simplified system. “The business structures adopted by many e-commerce companies are constantly changing. While the SSTIS has adopted a voluntary system, it is conceivable that numerous e-commerce companies may want to volunteer to use the system as a means of avoiding any potential tax conflicts with the states,” Larry Walters, Professor of Public Policy at George Mason University concluded.
This is quite a hot button issue anymore with local business griping about revenue lost through internet sales. Surprised you aren't aware of all this...

(EDIT) Sorry... I guess this is what you were referencing here "The federal government is, however, discussing the idea of implimenting a national sales tax so that everything purchased online will be taxed and turned into a federal collection agency."
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Old February 15th, 2006, 12:09 PM   #17
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Join Date: Feb 2006
Posts: 5
Dang! This just keeps getting better and better... I think I can safely say at this time I am SO proud I am a Texan! You "yanks" got it rough. :) j/k, kinda.

But on a serious response here. I know of no procedure that is required by any company, other than listing the amount of out of state revenues gained, on a federal income tax form that would even come close to "reporting" out of state earnings.

Not saying what they have "stated" on the NJ tax return is unenforceable, but I can't see how it could be. I, as a business owner, am responsible to collect MY state's sales tax..........some of the time. Many "types" of businesses are completely exempt and are not required to collect ANY sales tax on what they do AT ALL. It is determines SOLELY by the state the business is located. I'm sure things have changes a great deal since the internet has come into such force but I honestly think what they are doing is a disparate attempt to gain the revenue they are losing to "other" states.

It appears to me that by doing what they are doing in each one of these cases you have shown on here is in essence "cutting their own throats". The act of requiring ME as an Alaskan resident to pay YOUR states sales tax, will just push me away from buying anything from your business. Businesses are a dime a dozen on the internet anymore and one Google search will save me a chunk of money on cost, shipping and on taxes. Secondly, if I am not "using" that product in YOUR state they are subjecting me to double taxation IF I am required, as you are, to pay usage tax in my own home state.

There are only two solutions to their problem and I have no doubt one will eventually happen... Either 1). all businesses will be required to collect their own states sales tax across the board and no usage taxes will be charged, or 2). every business will not be collect any taxes and every state will instill a usage tax across the board OR 3). and this is the one I think will actually happen, sales taxes will be charges on personal face to face sales and ALL mail order sales will pay a National Tax and the federal government will decide how to "split" it (or whether to split it) with individual states.

As for Alaska, this is straight from the Alaska State web site:

Only 13 Cities located outside of Boroughs levy a property tax. Therefore, only 25 municipalities in Alaska (either cities or boroughs) levy a property tax.

90 municipalities (reporting) levy a general sales tax. Sales tax rates range from a low of 1% to a high of 7%.

The "typical" sales tax rates are from 3%-5%.

Other types of local taxes levied are raw fish taxes, hotel/motel "bed" taxes, severance taxes, liquor and tobacco taxes, gaming (pull tabs) taxes and fuel transfer taxes.

In 2005 local governments generated approximately $1.07 billion in revenues from property, sales and severance taxes. Of that amount $858.4 million was from property taxes.

There is no statewide sales tax levied.

There is no personal state income tax.
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