yeah, so odd that over 80% of States do it :rolleyes:
yes, I did. and that’s relevant to my comment how?
Because most of the “golly gee” posts you describe come from Britons, who don’t have to deal with state and local taxes. Australians, of course, do, and yet their tax codes are largely mutually comprehensible (to other Australians), so if they feel like explaining How It’s Done, they’ve got the right.
I’m not saying they don’t have the right, but they come off as worse-than-Americans when they pretend to not know how it works in other systems or it’s above their mental capacities to at least comprehend the whys of the regime.
Meh. I found it utterly incomprehensible at first, and I was already familiar with the federal systems of Germany, Australia and India. US states have a degree of autonomy - and perhaps because of it, a degree of fuck-what-everyone-else-is-doing attitude, that political divisions in other countries just don’t have.
Do talk to your accountant since the odds are he has not been paying, but you never know. You are also not the idiot that most people on these boards are making you out to be, California didn’t get serious about collecting use tax until this year, and it is likely that you can get a waiver to discharge the penalties from previous years. It it also likely that you will only owe tax going back to 2007. For my clients, even the one’s who buy lots and lots of stuff online, the use tax owed was not a lot of money, so again don’t freak out. Again, talk to your accountant, all standard disclaimers about this not being tax advice apply.
Like I said, I apologize if my comment is misplaced, but I get the sense that the folks from down under and around do this with alot of American policies. As if they have the monopoly on rational, wise behavior or something…
But this ignores that fact that, while Australians might have states, and those states do collect tax revenue, the relationship between federal and state tax revenue in Australia is quite different to that in the United States.
For example, as an Australian, when was the last time you filled out and submitted a state income tax return? Never, right? Because you don’t pay state income taxes in Australia. Here is the US, once i’ve finished filling out my federal return, i have to pull out my California 540 and fill that as well.
Furthermore, the whole sales and use tax revenue model is different. Here in the United States, the states themselves decide on whether or not to have a sales/use tax, what goods and services those taxes will apply to, and how much those taxes will be. In Australia, by contrast, the GST is determined and overseen on a national level, and the revenue from the tax is then distributed to the states and territories based on a formula that takes into account population, revenue-raising capacity, and the spending needs of each state and territory.
Really, in terms of taxation (and many other issues), it is difficult to equate Australia’s federal system with the American federal system, because a range of historical, logistical, and demographic differences had led the two countries to evolve their systems in very different ways. Comparisons are often useful and interesting, but they need to take account of those important differences, rather than simply assuming equivalency just because the two nations have “federal” systems.
Why? He’s right. That’s the #1 thing I tell my clients: if you’ve got the IRS on your back, that’s easy enough to deal with - the FTB will straight murder your ass and don’t feel sorry about it. They are vicious and aren’t governed by nearly as much regulation as the IRS, so they get away with a ton of stuff the IRS couldn’t dream of doing.
I’m not kidding: the FTB will ruin your life.
Thanks for all the advice. I’ll be calling my accountant this afternoon.
Good. Tax cheats are pretty much as bad as you can get.
I don’t disagree. Just saying: I have plenty of clients who literally did nothing wrong, but due to an error in the FTB, they are being raped by the state. Shit happens, errors are made, etc-- it just happens a lot more with the FTB because they have a lot more leeway.
Thanks for this heads up. Maybe I should call the person they assigned to me after all, regardless of what my accountant says. Who, by the way, is in NY, though he deals with lots of client in CA.
I live in California, and I report Use Tax (primarily from Amazon purchases) on my tax return. I believe there has been a line on the form for Use Tax since 2003 or 2004.
Two informative links:
Franchise Tax Board Use Tax page
A policy briefing that was done for the Minnesota legislature on use tax collection in other states. Fascinating reading for anyone who wants to know more about Use Tax in the U.S.
Just so you know, states are starting to ask large internet retailers for their sales reports of individuals with a lot of purchases to collect use tax. States are broke, the populace doesn’t have the stomach for “new” taxes - hey, how about we just enforce the ones on our books, starting by calling Amazon and asking for sales records…
Is this letter from the State of California? I think it would be from the “Board of Equalization” or the “Franchise Tax Board” if it’s legit.
I’m skeptical that this letter is from the actual government and not some scam trying to scare you into paying them for something you can do yourself for free. As a homeowner I get something like this every month, trying to scare me into doing something or another because I own a home or need to have my taxes “corrected”.
It might be real- years ago, before internet shopping was so big, the NY newspapers reported that NY had sent tax agents to NJ malls to take photos of the cars with NY plates. The owners were sent letter telling them they owed NYS use taxes on anything they purchased in NJ and brought back to NY. And the brought back to NY is important- the tax isn’t based on residency, it’s based on where the item is used. If I buy furniture in either NY or NJ and have it delivered to my (fictional) second house in NJ, I don’t owe NY any taxes even though I am a NY resident.
(That’s how Leona Helmsley cheated- she had empty boxes shipped out of state so the store was not required to collect the taxes)
It’s likely real. If there is any doubt, look to see who the letter is from. The letter should be from the state Board of Equalization, so if it is not then start questioning how real it is.
On the other hand, almost anything you get about property taxes is a scam. Well, sort of a scam. You can do anything those letters offer on your own for free. It requires filling out some paperwork and doing some research, all in all maybe 3 hours of your own time. Also, if all you want is a re-appraisal of your property by the county assessors office, the county of Los Angeles is doing (did already this year) those automatically, and if you don’t live in LA county your local county may well be doing so too.
It’s from the State Board of Equalization, P.O. Box 942879 (boe.ca.gov).
Which is the reason I report and pay use tax on my Amazon purchases.
North Carolina collects “use tax” too – if you buy something out of state (i.e., order it across state lines) that you would have paid sales tax on if you had bought it in-state, you have to pay taxes on it. However, they made it easy – if you can prove you didn’t buy anything out of state, you’re exempt. But, presuming you didn’t buy any single item costing $1,000 or more out of state (there’s a separate way to report that), you can simply pay an estimated use tax on your state income tax return, which is based on your adjusted gross income. Although we didn’t order anything and could claim to be exempt, we chose not to try to prove that, as at our income level our estimated use tax the last few years has been either $2 or $1. So we simply included that on our return for simplicity’s sake.