BajaNomad - U.S. CA tax Payers

U.S. CA tax Payers

TMW - 2-23-2018 at 11:55 AM

Interesting thing I found out yesterday. I had my income taxes done yesterday and my tax lady asked if I purchased anything on line that I did not pay CA sales tax on. I told her I probably did but I don't remember when or what it was. Most of my on line purchases are with Amazon and they charge taxes. I usually don't keep the receipt unless it's a major purchase.

She said CA wants you to pay the tax if it was not included in the bill and the tax preparer is required to ask you about it.

That's the first time I've been asked.

[Edited on 2-23-2018 by TMW]

vandenberg - 2-23-2018 at 12:30 PM

No doubt everybody would be happy to supply that information. :biggrin:

ncampion - 2-23-2018 at 12:59 PM

That's been a question on Turbo Tax for the past few years. The correct answer is NO.

pauldavidmena - 2-23-2018 at 01:43 PM

Our accountant in MA always asks us the same question every year. He often shakes his head for us in case we're unsure of our answer.

BajaMama - 2-23-2018 at 02:13 PM

That is a CA legal requirement; most states now collect CA sales tax. But if you're like me you don't bother keeping track of states that don't

Sales Tax Cheats

MrBillM - 2-23-2018 at 02:20 PM

Having no idea how long it has been the case, it's been as long as I can remember that one was responsible for paying said taxes.

Obviously, unless it was some BIG ticket item that (for some reason) came to the attention of the Franchise Tax Board, there is simply no way for the state to KNOW (prove) that one has evaded the taxes.

Which is why there has been (for some years) an ongoing campaign by some states (California included) to force (or coerce) online vendors to collect the tax. Short of changes in Federal law, the reliance has been on pressuring the BIG vendors (such as Amazon) who have a presence within the state. Amazon itself does collect the tax, but many of their "associates" do not.

So far.

bajaric - 2-23-2018 at 02:44 PM

author=MrBillM]Having no idea how long it has been the case, it's been as long as I can remember that one was responsible for paying said taxes.

Mr. Bill you have no idea what you are talking about.
internet purchases have always been taxed as interstate commerce, under federal law. tax exempt. Maybe that's why Amazon has its headquarters for tax purposes in some tiny place no one has ever heard of

John Harper - 2-23-2018 at 03:05 PM

Yes, it's more likely some states are seeing loss of sales tax revenue from "brick and mortar" locations within the state.

John

woody with a view - 2-23-2018 at 03:51 PM

Do they consider your CC billing addy or delivery of taxable item addy for the tax? You know, if you sent item to another state.

PAY The TAXMAN

MrBillM - 2-23-2018 at 05:08 PM

Before you spout verbal Diarrhea KNOW what you're talking about ..................... I was (clearly, I thought) speaking to the CALIFORNIA legal position regarding the paying of use tax (in lieu of sales tax):

https://www.ftb.ca.gov/individuals/use-tax.shtml

"..........You may owe use tax on purchases you made from out-of-state or Internet sellers. Use tax is similar to the sales tax paid on purchases you make in California. You may report use tax on your income tax return instead of filing a use tax return with the California Department of Tax and Fee Administration. To report use tax on your income tax return, you may use either the Use Tax Worksheet or the Use Tax Lookup Table. Both are included in the tax booklet instructions.

You must pay California use tax when you purchase out-of-state items by telephone, Internet, mail, or in person and both of the following apply:

The seller does not collect California sales or use tax.
You use, give away, store, or consume the item in this state.

---------------------------------------------------------------------------------

As I said, the foregoing has been the law in California for as long as I can remember.

As to the California (and other states) battle with Amazon:

https://en.wikipedia.org/wiki/Amazon_tax

[Edited on 2-24-2018 by MrBillM]

BajaBlanca - 2-24-2018 at 08:55 AM

the taxman shaking his head while asking the question is very funny!

BajaMama - 2-25-2018 at 08:03 AM

As an online shopper I know that most internet vendors collect sales tax for California. Recently I ordered a knife from Virginia, it was a big ticket item, but they did not collect sales tax. I was kinda surprised since every other vendor has collected for several years now. But since I returned the knife it was okay I did not track it...

bajapedro - 2-25-2018 at 08:07 AM

I buy everything I can on line from out of state just to avoid paying the state of "corruption and overtaxation" sales tax.

David K - 2-25-2018 at 09:27 AM

If it's any comfort, M&E BOOKS (in El Cajon, CA) does not add sales tax onto the book price (or any U.S. postage or handling charge) for my Baja California Land of Missions book: www.oldmissions.com

EDIT: Just so there is no confusion, M&E does pay the California sales tax on every purchase, they just do not ADD the tax on top of the price to the buyer. That and the free shipping to U.S. addresses is equal to about a $6 discount off the actual cost of the book.... making the book itself about $24.

:light:

[Edited on 2-25-2018 by David K]

Big-Tickets Online

MrBillM - 2-25-2018 at 10:34 AM

Checking my extensive order history with Amazon.com two days ago, I found that (7) of the last (12) orders did not include CA sales tax. Granted, they were not really High-Ticket items. The highest total on an order that wasn't taxed was $249.99 with the second-largest (and latest) $138.65.

Those who are unsure of their various purchases through Amazon can check order details going back (at least) to 2005.

Beyond the legal question, whether or not an individual should voluntarily pay the (equivalent) Use Tax is a personal decision that can be debated (as evading taxes often is), BUT knowing what is owed (with Amazon and other vendors) is a simple process.

It is called Sales and Use Tax

thebajarunner - 2-26-2018 at 02:22 PM

Whether you buy it in California and pay tax or buy it elsewhere and "use" it as a California resident makes no difference. The tax is due. Mr. Bill, Amazon charges sales tax on all the sales made directly through Amazon. Much of the business done through Amazon is actually brokered to other companies and they may or may not charge the tax. If not charged, it is still due.

And then, of course comes the fun part. Loving the great State of California as we all do, and wanting to help it maintain its position as the most vicious and successful taxing agency outside of IRS we all want to do our part, right??? Wink, wink, nudge, nudge.

So folks, do your part, fess up to everything you got up in Oregon without sales tax and help support Gov. JB on his way out.

Those who bought cars out of state and brought them into California have always known how this little game works. No tax, no license. Easy to enforce. Not so easy on your internet purchases or the Oregon outlet mall.

Want an ugly example??? My late Baja racing partner Chuck (we finished second in pickup class in the 1000 many years ago) bought a light sport aircraft from a private party ten years ago for $60k. First time he flew it the wings flew off and Chuck was killed. His widow got a bill from Gov. Jerry a month later for $5000 and it was collected under severe duress. And they didn't even send a sympathy card.

Thanks for AGREEING with What I'd already SAID

MrBillM - 2-26-2018 at 03:07 PM

Affirmation is always appreciated.

Actually I was not agreeing with what you said.

thebajarunner - 2-26-2018 at 03:10 PM

But why quibble over small stuff.
You indicated that half of your Amazon purchases were sans sales tax and I was trying to point out that the reason for this was that you likely were buying from other vendors, brokered by Amazon.
So, sorry for the quibble back to your quibble.

Bajaboy - 2-26-2018 at 03:14 PM

Quote: Originally posted by David K

If it's any comfort, M&E BOOKS (in El Cajon, CA) does not add sales tax onto the book price (or any U.S. postage or handling charge) for my Baja California Land of Missions book: www.oldmissions.com

EDIT: Just so there is no confusion, M&E does pay the California sales tax on every purchase, they just do not ADD the tax on top of the price to the buyer. That and the free shipping to U.S. addresses is equal to about a $6 discount off the actual cost of the book.... making the book itself about $24.

:light:

[Edited on 2-25-2018 by David K]

Basically you include this in the price of the book. I wish more would do the same.

TMW - 2-26-2018 at 03:26 PM

I've met people from Europe that thought it odd that a sales tax was added on at the point of sale in the US. They pay what the price is of the item as shown. Yes they pay a tax but it is added before the point of sale similar to what David is doing. They call it a value added tax. It is added at various step to the product as it makes its way to the customer.

It is called IVA in Mexico

thebajarunner - 2-26-2018 at 04:41 PM

Quote: Originally posted by TMW

I've met people from Europe that thought it odd that a sales tax was added on at the point of sale in the US. They pay what the price is of the item as shown. Yes they pay a tax but it is added before the point of sale similar to what David is doing. They call it a value added tax. It is added at various step to the product as it makes its way to the customer.

They do the same in Mexico
Called Value Added Tax
I will take our US sales tax system any day over IVA
The hidden costs to the consumer of VAT are way past the simple add on sales tax

Picking Nettlesome Nits

MrBillM - 2-26-2018 at 06:03 PM

I can only "Assume" that the Bajarunner comment resulted from his incomplete reading of the entire thread which would explain his ignorance.

In my second post on this thread, I noted:

" ........ Short of changes in Federal law, the reliance has been on pressuring the BIG vendors (such as Amazon) who have a presence within the state. Amazon itself does collect the tax, but many of their "associates" do not .........."

Are we clear Now that WE agree ?

The POINT that I was making in the last post was that (due to the "partner" loophole, a significant number of orders (in many cases, a majority) purchased through Amazon.com result in no sales tax collected.

Much of Amazon's argument against collecting and forwarding sales tax to the appropriate states for ALL sales made through their websites centered around those "associates', affiliates or (amazon's term) "partners".

https://en.wikipedia.org/wiki/Amazon_tax

" ....... as of April 2017 collects sales taxes from customers in all 45 states that have a state sales tax and in Washington, D.C ........ Additionally, approximately half of all Amazon.com purchases are sold on the Amazon Marketplace through 3rd-party vendors, and these purchases remain free of tax ........Those states include several where Amazon has a clear physical presence via distribution centers and wholly owned subsidiaries ......... During the first wave of "Amazon laws", many states determined that if an affiliate or other entity in the state received compensation for referrals to an online retailer, then that constituted a nexus in the state and hence retailers were liable for collecting sales taxes. In many cases, after these laws were passed, Amazon shut down its affiliate program in those states and was able to avoid collecting sales taxes .......... In 2011, Amazon threatened to terminate roughly 10,000 of its affiliates located in California if legislation pending in the state legislature to deem such affiliates as constituting a nexus that requires the collection of sales tax is passed .......... In July 2011, Amazon made good on its promises to terminate California affiliates. According to the Performance Marketing Association, there were 25,000 Amazon affiliates based in California .......... In response to resistance from Amazon.com, other online retailers, and anti-tax groups, the State of California agreed to a delay of one year before requiring online retailers to begin collecting sales tax on sales to California addresses. In return for the one-year delay, Amazon.com says it will create 10,000 full-time jobs, 25,000 seasonal jobs, invest $500 million in various facilities in California over the next few years, and begin remitting sales taxes on orders shipped to California ......... California began collecting sales taxes on September 15, 2012 and the rate will depend upon where the buyer is located. However, this requirement may not apply to third-party sellers on Amazon ........."

TMW - 2-27-2018 at 12:02 PM

I just purchased three Dom Deluise cook books on Amazon and two did not have a sales tax.

AKgringo - 2-27-2018 at 12:26 PM

To stay in line with California's social policies, there should be a tax added to every book to pay for audio versions for those who never learned to read!

It will have to be pretty high to ensure that the language of the user's choice is available. I mean...if you can afford to buy a cook book, or a guide to Baja missions, you must be rich enough to pay your fair share!

TMW - 2-27-2018 at 01:33 PM

I buy the used versions they are much cheaper.

A Taxing Thought

MrBillM - 2-27-2018 at 02:54 PM

On taxing thought ?

Given that there are continuing (and more frequent) proposals for extending the sales tax to "services", that day may well come as states and municipalities search for needed funds.