Consumer's Use Tax??? Blah!! (1 Viewer)

[Scott L]

Anyone notice anything different when filing their state taxes this year? There's a box on my form (Section P for VA telefile) that says Consumer's Use Tax. Supposedly I have to pay Virginia taxes for anything I bought over the internet and phone if it costs over $100.
Does that sound ludicrous to anyone else? Why should VA get paid for something that was manufactured and sold in Illinois?
Or maybe this is not so new?

 

[Michael Reuben]

Why should VA get paid for something that was manufactured and sold in Illinois?

They're not taxing the goods; they're taxing you, the Virginia resident. It's your "use" of the goods that's being taxed, not the sale. It'd be the same if you went to Illinois, worked for a week, got paid for the job and came home -- the income would be subject to state income tax (Virginia taxes income, doesn't it?).
M.

 

[Don Black]

That's why it's called "sales and use tax" and not just "sales tax." Be careful though, the VA Department of Taxation and Finance requires UPS, FedEx, and Airbore to submit to them records of all packages that are shipped within the state over a certain amount. If you don't report things that are over this amount (I'm not sure what it is), and they have it on file from one of the shipping carriers, then it could trigger an audit. Fairfax County is amazingly efficient when it comes to collecting taxes.

 

[Scott L]

Ok I understand sales and use tax. I bought a Kenwood htb-504 which cost $40 to ship to my house ($385 to buy). You really think something as small as this could trigger an audit? I'm only 22, I don't think an audit would look good on my records right about now.
edit- If the CU Tax will be the norm, I will definitely look at buying more things at brick & morter shops. Paying for the item, it's shipping AND tax is gonna add up.

 

[David Oliver]

Don,

How in the world would the carriers know what the cost is of what's inside the box?

 

[Scott L]

Maybe they look at shipping costs? Generally the heavier it is the more expensive it is, same with HT. Still a broad view though...

 

[SteveA]

Maybe they look at shipping costs? Generally the heavier it is the more expensive it is, same with HT. Still a broad view though...

Ha! I guess the diamond engagement ring I ordered from Blue Nile won't raise any red flags with the state then. The box was very small, very light, and the contents were VERY expensive!

 

[Dennis Nicholls]

since states without sales tax would become popular destinations for e-businesses.

This has already happened. Amazon has their big warehouse in Fernley NV right across the border from CA, the largest market in the US. Seems like most etailers congregate around OR and NV, two taxfree states.

 

[Marc S Kessler]

Several years ago I read where trucks were being stopped coming into the state (I think it was Fla.) and shipments destined to private addresses, not businesses, had their manifests checked for goods that are taxable. People receiving these were assessed for use (sales) tax.

States that depend mostly on sales taxes are the most aggressive in collecting them.

 

[Don Black]

I believe it's done by declared value/insurance value and not weight. So, if Blue Nile insured with FedEx/UPS your ring for $10k, then that's the number they have. I believe the number is high .. something like $10k. So I wouldn't be too worried... It's more for businesses than consumers.

 

[Mikael Soderholm]

I don't think a local entity (state, city, county, municipality, whatever) is entitled to sales tax revenue on anything you buy outside of its jurisdiction.

A question out of curiosity from someone living in a country that has no local sales tax (but a federal one called VAT @ 25%!), why do you think they are entitled to sales tax inside their jurisdiction? Apparently some states choose not to charge it, so it is not like it is a natural law that every sales transaction must be taxed, is it..?

Or am I getting too political now? If so, please just ignore this post...

 

[SteveA]

All states need tax revenue (unfortunately) but different states use different means of obtaining it. Florida, for instance, has no personal income tax, but has a fairly high sales tax. Why? Because that way a large portion of their revenue comes from non-resident tourists. Smart!

Other states, like New Hampshire (I think) have no sales tax, but tax property out the ass! Here in Virginia, we get a little bit of everything: a moderate income tax, moderate sales tax, and moderate property taxes.

 

[LDfan]

It's crap like this that pisses me off.

Guess why ticket scalping is illegal? Not because it's unfair to the consumer but because gov't doesn't get any tax money from the ticket sale. It's ridiculous to think it's unfair to a consumer to pay a high price for a scalped ticket. If the consumer doesn't like the price they don't have to buy it. Plain and simple.

Jeff

 

[Thomas Newton]

Use tax always sounded to me like an attempt to evade the Constitution.

The Constitution gave Congress the authority to regulate interstate trade, in large part to put an end to trade wars amongst the original States. This includes the ability to regulate import/export tarrifs.

The States could go to Congress and ask for permission to collect state sales tax on interstate purchases, but apparently they either have not done so, or have been turned down, for only mail-order vendors with a physical presence in your state can be compelled to collect state sales tax.

Hence the so-called "use tax" that conveniently does not apply to articles on which state sales tax has been paid.