Tax Evasion on Internet Purchases?

[RJP]

Broken off from a tangent on a recent thread...

Beyond the potential for lower prices available when purchasing items on-line, most folks also factor "no sales tax" into their overall savings from online purchases. These savings are, however, illusory. If you live in a state which charges a sales tax you still owe that tax, regardless of where you purchased the item. This is for the most part also true for any other county, municipal, or jurisdictional sales tax that might be owed where you live.

A Use Tax is a substitute for sales tax. All states which have a sales tax also impose a use tax. The use tax rate is the same as the sales tax rate, and is based on the purchase price of the item

Use tax applies when sales tax has not been charged. For instance, if you live in California and purchased goods from a supplier located in NY, whether by mail order or by taking delivery in NY, use tax is due and payable in California if the goods are brought to California. Purchases made over the internet and out-of-state are the most common type of transactions subject to a use tax. A state resident does not escape sales tax by purchasing out-of-state or over the internet.

Under state laws in the 45 states that do impose a use tax, any person who evades the reporting, assessment or payment of sales taxes or use taxes that would otherwise be due may be guilty of tax evasion. Violators are subject to fines, penalties, interest and/or prosecution. Note that "I didn't know there was such a thing as a use tax..." is not an adequate defense for evading payment.

So, have you paid YOUR use tax lately?

 

[vladimir]

Actually, I am guilty of tax evasion due to the bank accounts in the Channel Islands and Panama and the passport from Mozambique. The sales tax thing is just the icing on the cake.

Here's a related discussion:

http://www.scubaboard.com/forums/basic-scuba-discussions/234717-internet-sales-tax.html

 

[Garrobo]

If you are dumb enough to volutarily pay taxes on an out-of-state purchase or state that you have done so without paying on your state tax returns, that's your problem.

 

[RJP]

If you are dumb enough to volutarily pay taxes on an out-of-state purchase...that's your problem.

So what you're saying is essentially "if you're dumb enough to obey the law..." right?

 

[gNats]

Can this post be used against me as incriminating evidence?

Can I still plead the 5th if I participate in this discussion?

Does anyone care that I work for the IRS?

Wow, as long as we are being all honest and everything, why doesn't someone post a topic like: How often do you cheat on your spouse or Do you drink and drive?

I will admit to a lot of things, but nothing that can be tracked to my 1040!

 

[PhilEllis]

Beyond the potential for lower prices available when purchasing items on-line, most folks also factor ÅÏo sales tax into their overall savings from online purchases. These savings are, however, illusory. If you live in a state which charges a sales tax you still owe that tax, regardless of where you purchased the item. This is for the most part also true for any other county, municipal, or jurisdictional sales tax that might be owed where you live.

A Use Tax is a substitute for sales tax. All states which have a sales tax also impose a use tax. The use tax rate is the same as the sales tax rate, and is based on the purchase price of the item

Use tax applies when sales tax has not been charged. For instance, if you live in California and purchased goods from a supplier located in NY, whether by mail order or by taking delivery in NY, use tax is due and payable in California if the goods are brought to California. Purchases made over the internet and out-of-state are the most common type of transactions subject to a use tax. A state resident does not escape sales tax by purchasing out-of-state or over the internet.

Under state laws in the 45 states that do impose a use tax, any person who evades the reporting, assessment or payment of sales taxes or use taxes that would otherwise be due may be guilty of tax evasion. Violators are subject to fines, penalties, interest and/or prosecution. Note that "I didn't know there was such a thing as a use tax..." is not an adequate defense for evading payment.

So, have you paid YOUR use tax lately?

I actually asked a representative of from the Legal Findings branch of the Alabama Department of Revenue if individuals use the provision of the Alabama State Income Tax return to properly report use tax obligations for materials purchased outside of the State of Alabama. Surprisingly, he said that about 4% of all individual tax returns report "some" tax obligation under the use tax requirement. Corporate and business returns use a special form for this reporting and almost 80% file the use tax return.

Phil Ellis

 

[BDSC]

I live in North Carolina and we have some sort of thing you can check on your state return that estimates your use tax or whatever it is. It's based on your adjusted gross income. So I look at it this way. There is no real way they are going to check and see what you have purchased online or dig into anything like that. I guess they have to rely on people being honest about it. So I pay it. It's not much at all and I figure if they see you pay it, then they're gonna assume you are off the wall honest and never look any further into your returns. So far I've never been checked!

BDSC

 

[ScubaSteve]

I will not "vote" on the poll because you have excluded the entire world (not that we are in a global environment or a board with members from around the world ) but will say adamently that I have internet purchases shipped via different methond that I know will get me around specific fees. The government gets too much of my money as it is and IMHO I do not see enough in return.

Heck, I even won against the government and had them pay for damages to my car that occurred on a poorly kept highway. That was a victory of epic proportion in my books.

 

[mavdog]

I deduct my scuba gear as a work related.

 

[BDSC]

I will not "vote" on the poll because you have excluded the entire world (not that we are in a global environment or a board with members from around the world ) but will say adamently that I have internet purchases shipped via different methond that I know will get me around specific fees. The government gets too much of my money as it is and IMHO I do not see enough in return.

Heck, I even won against the government and had them pay for damages to my car that occurred on a poorly kept highway. That was a victory of epic proportion in my books.

Epic Proportion? That should be one for the history books. You're my hero!

BDSC