TAX THOSE RICH BASTIDS

[Timminz]

Right, so they've essentially been able to write-off the cost of building the thing twice. Once, when they use the deduction in the year it's built, and then again, either incrementally, as it depreciates, or at the point when they sell it (or more likely, a combination of the two).

Is there something I'm overlooking here?

Yes, you're assuming that a depreciated building will retain its value. The supposed reason for depreciation as a deduction both for book purposes and tax purposes is because a building (or tangible personal property) does not retain its original value over the course of time. Therefore, at least theoretically (I'm not sure how it works in practice), a building that is 50 years old is less valuable than a building that is 20 years old or 10 years old. Therefore, the sales price is likely much less for a 50 year old building than a brand new building. Hence depreciation.

No, I'm definitely not assuming that. Depreciation is a real expense, and I have no issues with that. Things lose value over time, and can appropriately be written-off as an expense. The problem I see, is allowing a deduction, up-front, for the entire cost of a long-term investment. It allows double-counting of the cost. It's either an expense (deduction) up-front (and pure profit if and when it's sold), or it can be written off over the useful life of the asset. The way I'm understanding you, it can be both, and that's kinda ridiculous.

I have to think about it (or call in a life-line). I'm either getting it wrong or there is a double deduction (in which case I agree with you). I'm trying to think about whether costs of construction are deductible or not for financial statement purposes.

That would depend on what kind of business you were, and what you were constructing.

[thegreekdog]

Player, just one thing with your post - People that make $20,000 generally don't pay a whole lot of taxes. I'm not making a judgment call here, but please keep in mind these types of things when you're making you're judgment calls.

In any event, I've always wanted to start my own tax system. What would I do and what would it look like? And my tax system would have some of your basic elements in it (and Timminz's as well). For example, income would simply be revenues less costs, where costs could be deductible only once. Costs would not include salaries for owners or executives (so a company could not deduct any executive compensation). I have some other ideas, but I haven't thought about it in a long time.

[PLAYER57832]

Player, just one thing with your post - People that make $20,000 generally don't pay a whole lot of taxes. I'm not making a judgment call here, but please keep in mind these types of things when you're making you're judgment calls.

I believe I said that. Nor could increasing the taxes they pay do much to pay down the deficite. BUT, most companies could well afford to pay more and many really should. They don't because, basically they write the rules. It is not truly about equity or any such measure. And, far too much of what companies are fully and legitimately allowed to deduct hurts us all in the long run.

When companies are encourage to offer uniforms, it boosts the uniform clothing industry. THAT is the real and true reason for that deduction. Similarly, the biggest group against lowering the limit on food and entertainment was.. restaurants, etc. I say eliminate all that and just let them make decisions based on the real costs. If its cost-effective, its cost-effective. None of this "this is not really part of our profit" garbage created by tax incentives. NONE of it.

Probably the best example of skewing in a bad way is health insurance. But, there are other examples.

In any event, I've always wanted to start my own tax system. What would I do and what would it look like? And my tax system would have some of your basic elements in it (and Timminz's as well). For example, income would simply be revenues less costs, where costs could be deductible only once. Costs would not include salaries for owners or executives (so a company could not deduct any executive compensation). I have some other ideas, but I haven't thought about it in a long time.

You might be in a good position to offer excellent ideas. However, I suspect the profit motive works to inhibit your desire to do so. (Yet another example of taxes skewing progress )

[thegreekdog]

You might be in a good position to offer excellent ideas. However, I suspect the profit motive works to inhibit your desire to do so. (Yet another example of taxes skewing progress )

Unfortunately (or perhaps fortunately for me), the complexities of the tax codes in the United States won't change on account of me.

A deduction for uniforms does not have to do with helping the uniform industry. It is a related benefit, sure, but it's not the reason. Companies don't want to have to pay income tax on income that does not take into account costs. The only thing I have a problem with is the double deduction for costs (as Timminz points out, which is dependent upon accounting which I'm sure I'm getting wrong somewhere). Although, I also have a problem with deductible executive compensation (but, at the same time, this is not something that should be legislated). Apart from that, I don't have a problem with any deductions.

[BigBallinStalin]

You might be in a good position to offer excellent ideas. However, I suspect the profit motive works to inhibit your desire to do so. (Yet another example of taxes skewing progress )

Unfortunately (or perhaps fortunately for me), the complexities of the tax codes in the United States won't change on account of me.

A deduction for uniforms does not have to do with helping the uniform industry. It is a related benefit, sure, but it's not the reason. Companies don't want to have to pay income tax on income that does not take into account costs. The only thing I have a problem with is the double deduction for costs (as Timminz points out, which is dependent upon accounting which I'm sure I'm getting wrong somewhere). Although, I also have a problem with deductible executive compensation (but, at the same time, this is not something that should be legislated). Apart from that, I don't have a problem with any deductions.

Are bonuses ever taxed/deductible for the company? Or are they solely counted as income for the beneficiary?

[PLAYER57832]

You might be in a good position to offer excellent ideas. However, I suspect the profit motive works to inhibit your desire to do so. (Yet another example of taxes skewing progress )

Unfortunately (or perhaps fortunately for me), the complexities of the tax codes in the United States won't change on account of me.

A deduction for uniforms does not have to do with helping the uniform industry. It is a related benefit, sure, but it's not the reason. Companies don't want to have to pay income tax on income that does not take into account costs.

Companies don't want to have to pay taxes... period, not really. No one does, for that matter. But, the point is why is that a "legitimate cost". Are uniforms necessary to production? Occasionally, yes. You cannot dive without diving equipment. Fire retardent gear is necessary to fight fires. However, do you NEED a uniform to operate a machine? No. It is a convenience, plain and simple. It is more of a convenience because companies get to deduc the cost.

See, you start with the assumption that the way we do things makes sense. I do not... and that is my basic point.

[BigBallinStalin]

You might be in a good position to offer excellent ideas. However, I suspect the profit motive works to inhibit your desire to do so. (Yet another example of taxes skewing progress )

Unfortunately (or perhaps fortunately for me), the complexities of the tax codes in the United States won't change on account of me.

A deduction for uniforms does not have to do with helping the uniform industry. It is a related benefit, sure, but it's not the reason. Companies don't want to have to pay income tax on income that does not take into account costs.

Companies don't want to have to pay taxes... period, not really. No one does, for that matter. But, the point is why is that a "legitimate cost". Are uniforms necessary to production? Occasionally, yes. You cannot dive without diving equipment. Fire retardent gear is necessary to fight fires. However, do you NEED a uniform to operate a machine? No. It is a convenience, plain and simple. It is more of a convenience because companies get to deduc the cost.

See, you start with the assumption that the way we do things makes sense. I do not... and that is my basic point.

Technically, you'll never need a uniform to do any task because anything can be done butt-naked or in street clothes, but you're overlooking the other necessities that a uniform can provide like:

1) security for ID purposes within a company, (like at a chemical plant)
2) transparency, which clarifies who's working for who, who's working where, and to distinguish one's employees from customers/visitors
3) solidarity within the workplace: Uniforms provide a inexpensive, corporate identity that contributes to its culture in a positive manner.
4) psychological reasons: The semblance of authority, or a show of legitimacy

[thegreekdog]

You might be in a good position to offer excellent ideas. However, I suspect the profit motive works to inhibit your desire to do so. (Yet another example of taxes skewing progress )

Unfortunately (or perhaps fortunately for me), the complexities of the tax codes in the United States won't change on account of me.

A deduction for uniforms does not have to do with helping the uniform industry. It is a related benefit, sure, but it's not the reason. Companies don't want to have to pay income tax on income that does not take into account costs.

Companies don't want to have to pay taxes... period, not really. No one does, for that matter. But, the point is why is that a "legitimate cost". Are uniforms necessary to production? Occasionally, yes. You cannot dive without diving equipment. Fire retardent gear is necessary to fight fires. However, do you NEED a uniform to operate a machine? No. It is a convenience, plain and simple. It is more of a convenience because companies get to deduc the cost.

See, you start with the assumption that the way we do things makes sense. I do not... and that is my basic point.

AHA! You fell into my trap!

Uniforms are required by regulations and laws that are passed by governments (or mandated by federal agencies)!!!

MWAHAHAHAHAHAHA!!!!

So, when you say, "Do you need a uniform to operate a machine?" Perhaps the answer is no, but gosh darnit the federal government is going to make for damn sure that Ford is providing uniforms to their employees.

[PLAYER57832]

You might be in a good position to offer excellent ideas. However, I suspect the profit motive works to inhibit your desire to do so. (Yet another example of taxes skewing progress )

Unfortunately (or perhaps fortunately for me), the complexities of the tax codes in the United States won't change on account of me.

A deduction for uniforms does not have to do with helping the uniform industry. It is a related benefit, sure, but it's not the reason. Companies don't want to have to pay income tax on income that does not take into account costs.

Companies don't want to have to pay taxes... period, not really. No one does, for that matter. But, the point is why is that a "legitimate cost". Are uniforms necessary to production? Occasionally, yes. You cannot dive without diving equipment. Fire retardent gear is necessary to fight fires. However, do you NEED a uniform to operate a machine? No. It is a convenience, plain and simple. It is more of a convenience because companies get to deduc the cost.

See, you start with the assumption that the way we do things makes sense. I do not... and that is my basic point.

AHA! You fell into my trap!

Uniforms are required by regulations and laws that are passed by governments (or mandated by federal agencies)!!!

MWAHAHAHAHAHAHA!!!!

So, when you say, "Do you need a uniform to operate a machine?" Perhaps the answer is no, but gosh darnit the federal government is going to make for damn sure that Ford is providing uniforms to their employees.

No, this in no way refutes my argument. I said in some cases uniforms are necessary. However, Unless it is something well above basic clothing (special chemical resistant clothing, etc.), then it is .. clothes.

Also, sometimes maybe more effort should be placed on creating a safery environment overall, such as reducing the need for employees to be exposed to chemicals (so they don't need the special clothing, etc.).

The thing is that when the tax benefit is out there, a lot of things "somehow" wind up becoming "fully necessary expenses".

I may not be a fulltime tax professional, except... I sort of am, just on a smaller scale. I don't do corporate taxes, but I do business taxes. So, while I don't know all the many breaks that corporations get, I do see how these breaks operate to drive businesses to make decisions they might not otherwise. The details and scales differ, but the principles are basically the same.

[BigBallinStalin]

You might be in a good position to offer excellent ideas. However, I suspect the profit motive works to inhibit your desire to do so. (Yet another example of taxes skewing progress )

Unfortunately (or perhaps fortunately for me), the complexities of the tax codes in the United States won't change on account of me.

A deduction for uniforms does not have to do with helping the uniform industry. It is a related benefit, sure, but it's not the reason. Companies don't want to have to pay income tax on income that does not take into account costs.

Companies don't want to have to pay taxes... period, not really. No one does, for that matter. But, the point is why is that a "legitimate cost". Are uniforms necessary to production? Occasionally, yes. You cannot dive without diving equipment. Fire retardent gear is necessary to fight fires. However, do you NEED a uniform to operate a machine? No. It is a convenience, plain and simple. It is more of a convenience because companies get to deduc the cost.

See, you start with the assumption that the way we do things makes sense. I do not... and that is my basic point.

AHA! You fell into my trap!

Uniforms are required by regulations and laws that are passed by governments (or mandated by federal agencies)!!!

MWAHAHAHAHAHAHA!!!!

So, when you say, "Do you need a uniform to operate a machine?" Perhaps the answer is no, but gosh darnit the federal government is going to make for damn sure that Ford is providing uniforms to their employees.

OH SNAP!

[thegreekdog]

Player - Here's an example of why I get angry... at the end you'll see a quote accusing Amazon of using a "tax loophole." It's not a loophole. I'm familiar with these issues and Texas has no basis to assert sales tax on Amazon because of the United States Commerce Clause and Due Process Clause (which are in the Constitution... hence, they are not effing loopholes).

And yet, the person quoted at the bottom says "loophole."

http://news.yahoo.com/s/ap/20110210/ap_ ... ax_dispute

[Timminz]

So, they've found a way to sell stuff in Texas, to people in Texas, but they don't have to collect/remit Texas' sales tax?

Sounds like a loophole to me.

[thegreekdog]

So, they've found a way to sell stuff in Texas, to people in Texas, but they don't have to collect/remit Texas' sales tax?

Sounds like a loophole to me.

A constitutional loophole? I don't think such things exist.

In order for a state to be able to impose a sales tax on an entity (or person), the entity must have "nexus" with the state. Nexus has been determined, for sales tax purposes, to be physical contact with the state. There is arguably a different standard for nexus for purposes of income taxes.

"But TGD, Amazon must have physical presence in Texas because it sells books there and has a facility."

The sale of books does not equate to physical presence. If I live in Texas and order a book from Amazon I own the book as soon as I purchase it. Meaning, Amazon does not own the book when it gets to Texas. I own the book. Thus, Amazon has no physical presence because of the books.

If Amazon has a subsidiary which owns the facility in Texas (which I'm sure is the case), the subsidiary has physical presence and must collect sales tax from customers. Amazon itself, the company that sells the books online, does not actually have any property or physical presence in Texas. Thus, FOR PURPOSES OF THE UNITED STATES CONSTITUTION, THE SUPREME LAW OF THE UNITED STATES, Amazon does not have nexus, and thus does not have a sales tax collection responsibility in Texas.

"But TGD, how does Texas get its money?"

Well, my fake friend, Texas, like most states has what's called a use tax. A use tax requires that a person who buys a taxable product (such as a book) tax-free from a retailer must self-assess and remit use tax on the purchase of such book. Thus, Texas should be auditing Texas residents for use tax (or, alternatively or additionally, telling Texas residents that they have to pay use tax on books).

[PLAYER57832]

Player - Here's an example of why I get angry... at the end you'll see a quote accusing Amazon of using a "tax loophole." It's not a loophole. I'm familiar with these issues and Texas has no basis to assert sales tax on Amazon because of the United States Commerce Clause and Due Process Clause (which are in the Constitution... hence, they are not effing loopholes).

You are focusing on the name instead of the issue. Call it a "loophole", call it an exception that should not exist, but does. You wish to imply that we are saying companies taking advantage of legal loopholes somehow makes them "bad companies". That comes from you. (I am sure some people make that assertion, but not I). I specifically do not lay such blame. I lay blame on the poor taxing system. If I lay blame to corporations, it is for lobbying efforts to get such things passed...and I fully lay blame at all others involved (those who listen to the lobbyists).

It is not the job of companies to give the government extra money over what the legal tax code says they owe. It IS the responsibility of the rest of us to ensure that tax code requires enough taxes to run our government. So far, folks are too busy wanting their own personnal taxes cut to really make a legitimate effort at changing the system. This is why I have so little respect for the Tea Party. (also because it really is not one uniform party) Folks like Sarah Palin want to whine and whine and whine, but really and truly won't give anything back for what they expect, unless maybe its the military.

[thegreekdog]

Player - Here's an example of why I get angry... at the end you'll see a quote accusing Amazon of using a "tax loophole." It's not a loophole. I'm familiar with these issues and Texas has no basis to assert sales tax on Amazon because of the United States Commerce Clause and Due Process Clause (which are in the Constitution... hence, they are not effing loopholes).

You are focusing on the name instead of the issue. Call it a "loophole", call it an exception that should not exist, but does. You wish to imply that we are saying companies taking advantage of legal loopholes somehow makes them "bad companies". That comes from you. (I am sure some people make that assertion, but not I). I specifically do not lay such blame. I lay blame on the poor taxing system. If I lay blame to corporations, it is for lobbying efforts to get such things passed...and I fully lay blame at all others involved (those who listen to the lobbyists).

It is not the job of companies to give the government extra money over what the legal tax code says they owe. It IS the responsibility of the rest of us to ensure that tax code requires enough taxes to run our government. So far, folks are too busy wanting their own personnal taxes cut to really make a legitimate effort at changing the system. This is why I have so little respect for the Tea Party. (also because it really is not one uniform party) Folks like Sarah Palin want to whine and whine and whine, but really and truly won't give anything back for what they expect, unless maybe its the military.

There's an article or study somewhere that shows that conservatives give a whole boatload of money to charities. As you've indicated elsewhere, I'm not going to go find the study or article, but it's pretty unfair to say that people like Sarah Palin won't give anything back for what they expect. As I've said before, a lot of Tea Party people pay a whole boatload of taxes and give to charity, so don't give me the "you're not paying enough" horse manure.

[PLAYER57832]

So, they've found a way to sell stuff in Texas, to people in Texas, but they don't have to collect/remit Texas' sales tax?

Sounds like a loophole to me.

A constitutional loophole? I don't think such things exist.

In order for a state to be able to impose a sales tax on an entity (or person), the entity must have "nexus" with the state. Nexus has been determined, for sales tax purposes, to be physical contact with the state. There is arguably a different standard for nexus for purposes of income taxes.

Look, this is like the argument about justifying expenses. The point is that as long as there are these options, companies will choose whatever they can to pay less tax. When that "choice" winds up meaning all of the rest of us have to pay more taxes and start losing things that we need to get by, then it is a problem. When these taxes manipulate things well beyond true market forces, it can be very destructive.

"But TGD, Amazon must have physical presence in Texas because it sells books there and has a facility."

The sale of books does not equate to physical presence. If I live in Texas and order a book from Amazon I own the book as soon as I purchase it. Meaning, Amazon does not own the book when it gets to Texas. I own the book. Thus, Amazon has no physical presence because of the books.

This is a technical loophole that once did not exist. It exists now because of the internet, catalogue sales, etc. I believe it was Delaware that decided by offering a physical location and low taxes, they could bring companies in to increase their state revenues with minimum space investment. The result of this is to give out of state companies an effective advantage over in-state companies. This hurts local economies. on the one hand, favoring one state over another is only bad for the state not favored. However, when so much within a state depends upon that sales revenue, it hurts. And, in the very long run, hurts the entire nation. Part of that exception was ended, at least in some states, by requiring that people pay in state taxes on mail/internet purchases. However, I believe they came up against the interstate commerce clause (?).

If Amazon has a subsidiary which owns the facility in Texas (which I'm sure is the case), the subsidiary has physical presence and must collect sales tax from customers. Amazon itself, the company that sells the books online, does not actually have any property or physical presence in Texas. Thus, FOR PURPOSES OF THE UNITED STATES CONSTITUTION, THE SUPREME LAW OF THE UNITED STATES, Amazon does not have nexus, and thus does not have a sales tax collection responsibility in Texas.

Again, you are making distinctions without differences. We know this. (at least I do and I believe Timminz does) The question is not why it is how it is, or how it came to be. The question is whether this is best for the country as a whole or not.

"But TGD, how does Texas get its money?"

Well, my fake friend, Texas, like most states has what's called a use tax. A use tax requires that a person who buys a taxable product (such as a book) tax-free from a retailer must self-assess and remit use tax on the purchase of such book. Thus, Texas should be auditing Texas residents for use tax (or, alternatively or additionally, telling Texas residents that they have to pay use tax on books).

I will just say that auditing individuals is time-consuming and expensive. Rarely cost-effective. Monitoring companies takes far less time.

[PLAYER57832]

There's an article or study somewhere that shows that conservatives give a whole boatload of money to charities.

Never disagreed, but talking about conservatives in general and Tea Partiers like Sarah Palin are 2 different issues. Few of those people to whom you refer actually belong to any Tea Party.

Further, giving to charities of their choice does not replace tax revenue we need to make our nation run. In fact, when the charities include groups that argue against our freedoms, I would argue they can actually impede our government's real work.

Also, giving a "boaload" still doesn't mean they give out as much as they get. But that gets into another whole rats nest of discussion. I think we are in enough tangles right now.

As you've indicated elsewhere, I'm not going to go find the study or article, but it's pretty unfair to say that people like Sarah Palin won't give anything back for what they expect. As I've said before, a lot of Tea Party people pay a whole boatload of taxes and give to charity, so don't give me the "you're not paying enough" horse manure.

I mentioned Sarah Palin specifically for a reason. She was a big supporter of the Ketchikan bridge, yet is among the first to complain about high taxes. She herself, by-the-way does not make enough money to make a significant contribution to the country in terms of charity.

[thegreekdog]

Player, you're going to have to trust me on this... I do state taxes for a living. I'm not making this shit up. It's not a loophole. It's like saying the right to free speech is a loophole. These are constitutional principles that have been around since, well, the Constitution was drafted and have been refined by court cases over the years, the most latest of which is Quill (in 1992 I believe) which held that in order for a state to impose a sales or use tax on a company, the company must have physical presence in the state.

You mention catalogue and internet sales. The property must still be delivered. Since the 1800s, companies have delivered product using the drop shipment method. This is not a new phenomenon. Further, as I've indicated, there are ways for Texas to get its money, but they ignore those methods because it's easier and politically expedient to attempt to get money from Amazon rather than from the state's own residents.

To be honest, I have not thought about the alternative because it's too preposterous to fathom. If there were no constitutional principles governing the taxation of interstate commerce, every state would tax Amazon on every sale it makes no matter where the book or DVD ends up. If Amazon sent its product to Texas from Washington, without the Constitutional protections the Courts have laid out and upheld for 200 plus years, that product would be subject to sales tax in every state in which Amazon sent the product through... Amazon would end up with a sales tax rate in the 30s.

The true market force here is that Amazon does not have a physical presence in Texas. The buyers of Amazon's books have a physical presence in Texas. Texas has a use tax. The residents of Texas who buy Amazon books should be paying use tax. They aren't. Texas is angry because they're missing out on tax dollars so they've chosen to attack Amazon and their use of the "constitutional loophole." It's ridiculous.

The constitutional loophole is what is best for the country. Amazon pays taxes. It pays income taxes in Texas. It pays federal income taxes. It pays other state income taxes. It even collects sales tax from its customers in the states where Amazon itself has physical presence.

[PLAYER57832]

Player, you're going to have to trust me on this... I do state taxes for a living. I'm not making this shit up. It's not a loophole. It's like saying the right to free speech is a loophole. These are constitutional principles that have been around since, well, the Constitution was drafted and have been refined by court cases over the years, the most latest of which is Quill (in 1992 I believe) which held that in order for a state to impose a sales or use tax on a company, the company must have physical presence in the state.

I understand your position and, to a point agree. One of the more basic issue is does it make sense to even have seperate state tax systems, particularly in regards to large corporations. We have moved a long way from our country's creation. Intially, states wer basically independent nations joined together. When our country began, some people argued against a uniform monetary system, even.

This is very, very complicated. I am not going to get into the nitty-gritty details because I just don't have the time and I know it is your field. My point is just that we need to think more about whether all these rules benefit or harm us overall. The evidence seems to show harm. That is, our system is not sustainable. Our debt keeps growing. When the problems are so serious, it is time to challenge even some of the most basic assumptions. In that, perhaps someone like myself who is not so immersed can see new options, problems with the foundation better. However, when it comes to the fine details.. that will be up to you.

(you might be in a better position to see a leak at the base of a dam, but it will take a real engineer to fix it)

You mention catalogue and internet sales. The property must still be delivered. Since the 1800s, companies have delivered product using the drop shipment method. This is not a new phenomenon. Further, as I've indicated, there are ways for Texas to get its money, but they ignore those methods because it's easier and politically expedient to attempt to get money from Amazon rather than from the state's own residents.

I understand this. But, I don't accept that the system is fully functioning the best it can.
And, I think we need to consider pretty fundamental changes, not just little tweaks.

To be honest, I have not thought about the alternative because it's too preposterous to fathom. If there were no constitutional principles governing the taxation of interstate commerce, every state would tax Amazon on every sale it makes no matter where the book or DVD ends up. If Amazon sent its product to Texas from Washington, without the Constitutional protections the Courts have laid out and upheld for 200 plus years, that product would be subject to sales tax in every state in which Amazon sent the product through... Amazon would end up with a sales tax rate in the 30s.

The way the commerce clause is interpreted is that no individual state can "interfere" with commerce from another. Therefore, states cannot tax commodities bought in other states. (the rules were changed a couple decades ago, maybe more, to say that if a company has a physical location within a state they must pay taxes... before that was not the case and that is why Delaware, for example, had so many mail order companies)I know I am dating myself, but I can remember when you did not have to pay sales tax on catalogue purchases.

The true market force here is that Amazon does not have a physical presence in Texas.

You are missing the point. The question is WHY doesn't Amazon have a physical presence in Texas. A big part of that is differences in taxation.

The buyers of Amazon's books have a physical presence in Texas. Texas has a use tax. The residents of Texas who buy Amazon books should be paying use tax. They aren't. Texas is angry because they're missing out on tax dollars so they've chosen to attack Amazon and their use of the "constitutional loophole." It's ridiculous.

The constitutional loophole is what is best for the country. Amazon pays taxes. It pays income taxes in Texas. It pays federal income taxes. It pays other state income taxes. It even collects sales tax from its customers in the states where Amazon itself has physical presence.

Its not a constitutional loophole, its a taxation loophole. The fact is that when people can go out and buy something in another state online and avoid taxes, it hurts Texas. It's not "ridiculous", its reality. Whether that is overall a good thing or a bad thing is another question. I would argue, do argue that it is often a bad thing.

In this, I don't think you are fully objective because you do have a lot vested in the current system. Also, you keep wanting to say that attacks on the system mean we are claiming companies are being absusive. That is not true, as I said above.

[thegreekdog]

YAAAAH!!!!

the rules were changed a couple decades ago, maybe more, to say that if a company has a physical location within a state they must pay taxes... before that was not the case and that is why Delaware, for example, had so many mail order companies)

The rules were not changed!!!! The Quill case was where the state tried to get Quill to pay use tax... the default rule was that Quill did not have to pay use tax. Not to mention (patience, TGD, patience), IF YOU PURCHASE A TAXABLE ITEM FROM A VENDOR AND DO NOT PAY SALES TAX TO THE VENDOR, YOU ARE REQUIRED TO PAY USE TAX ON THAT PURCHASE!!! Use tax has been around for as long as sales taxes have been around. C'mon!

I can remember when you did not have to pay sales tax on catalogue purchases.

You still don't pay sales tax on catalogue purchases. See above... use tax.

why Delaware, for example, had so many mail order companies

It is common knowledge that Delaware does not have a sales tax. What is not common knowledge is that Delaware has a use tax and that Delaware has a gross receipts tax (which is like a sales tax except that the tax is not passed on to the customer).

The fact is that when people can go out and buy something in another state online and avoid taxes

YARGHHHHH!!! You can't avoid taxes by buying something online! Let me try to explain again...

- I buy a book from Barnes and Noble's store. I pay $5 of sales tax to Barnes and Noble. Barnes and Noble gives the tax to the state.
- I buy a book from Barnesandnoble.com. Barnes and Noble does not charge me sales tax because they are not required to collect sales tax because they don't have nexus with the state. I pay $5 of use tax to the state directly.

In either situation the state gets its money. If I don't pay use tax on my purchase, the state should come after me. This is the law. This is the law THAT THE STATE REQUIRES!!! This is not a freaking tax loophole!!! YARGH!!!!

[PLAYER57832]

YAAAAH!!!!

the rules were changed a couple decades ago, maybe more, to say that if a company has a physical location within a state they must pay taxes... before that was not the case and that is why Delaware, for example, had so many mail order companies)

The rules were not changed!!!! The Quill case was where the state tried to get Quill to pay use tax... the default rule was that Quill did not have to pay use tax. Not to mention (patience, TGD, patience), IF YOU PURCHASE A TAXABLE ITEM FROM A VENDOR AND DO NOT PAY SALES TAX TO THE VENDOR, YOU ARE REQUIRED TO PAY USE TAX ON THAT PURCHASE!!! Use tax has been around for as long as sales taxes have been around. C'mon!

Techically, you might be correct about WHY the rules changed. The fact remains that I used to not have to pay taxes on catalogue purchases. It balanced out the shipping charges making catalogue (online did not exist back then) purchases more cost-effective.

Then, the rules changed and I did. OH.. I am referring to sales taxes specifically, not "use taxes". I have never heard of "use taxes". Have never paid them to my knowledge , unless its just another name for sales tax. OOPs.. forgot about utility taxes. I believe a couple of those are called "use" taxes.

I can remember when you did not have to pay sales tax on catalogue purchases.

You still don't pay sales tax on catalogue purchases. See above... use tax. [/quote] see above, you are splitting technical hairs that don't matter to the rest of us. when I fill out my catalogue or online forms, it says "sales tax" not "use tax". And the rate is based upon the overall sales tax rates and conditions. (such as in PA we don't pay tax on clothing.. or didn't.)

why Delaware, for example, had so many mail order companies

It is common knowledge that Delaware does not have a sales tax. What is not common knowledge is that Delaware has a use tax and that Delaware has a gross receipts tax (which is like a sales tax except that the tax is not passed on to the customer).

The fact is that when people can go out and buy something in another state online and avoid taxes

YARGHHHHH!!! You can't avoid taxes by buying something online! Let me try to explain again...

- I buy a book from Barnes and Noble's store. I pay $5 of sales tax to Barnes and Noble. Barnes and Noble gives the tax to the state.
- I buy a book from Barnesandnoble.com. Barnes and Noble does not charge me sales tax because they are not required to collect sales tax because they don't have nexus with the state. I pay $5 of use tax to the state directly.

In either situation the state gets its money. If I don't pay use tax on my purchase, the state should come after me. This is the law. This is the law THAT THE STATE REQUIRES!!! This is not a freaking tax loophole!!! YARGH!!!![/quote]
see above. You are quibbling over terms instead of looking at the basic arguments. The argument is that companies choose to locate in states with low sales taxes and this impacts the overall economy.

[thegreekdog]

Okay, let's go back for a second.

States impose a sales tax and they also impose a use tax. All states that impose a sales tax also have a use tax. All.

The sales tax is imposed on the purchaser. The seller acts as an agent of the state, collects the money from the purchaser and remits the money to the state.

The use tax is also imposed on the purchaser. The purchaser pays the money to the state directly.

So let's go back to Texas and Amazon for a second. Texas, like a lot of states, imposes a sales tax and a use tax.

Texas sales tax is imposed on the purchaser (the person who buys the book). Amazon, the seller, acts as an agent of the state, collects the money from the purchaser and remits the money to Texas. That only happens if Amazon has physical contact or nexus with Texas. Amazon does not have physical presence in Texas and thus does not have nexus.

If Amazon does not have physical contact or nexus with Texas (as is the case right now), Amazon is not required to charge the purchaser sales tax. Instead...

The Texas use tax is imposed on the purchaser, the person who buys the book from Amazon. The purchaser pays the tax to Texas directly.

Any way you slice it, Texas gets its money. Any way you slice it, the ultimate purchaser is the person/entity who pays the tax. Whether Amazon charges tax to the purchaser or whether the purchaser pays directly, the purchaser is still the one who pays and Texas gets its money.

I'm telling you - these are all facts. There is no argument here.

[BigBallinStalin]

Don't stress it, TGD. At the very least, I'm sure some of us have learned a lot about politics and taxes and supposed loopholes.

[PLAYER57832]

Okay, let's go back for a second.

States impose a sales tax and they also impose a use tax. All states that impose a sales tax also have a use tax. All.

The sales tax is imposed on the purchaser. The seller acts as an agent of the state, collects the money from the purchaser and remits the money to the state.

The use tax is also imposed on the purchaser. The purchaser pays the money to the state directly.

So let's go back to Texas and Amazon for a second. Texas, like a lot of states, imposes a sales tax and a use tax.

Texas sales tax is imposed on the purchaser (the person who buys the book). Amazon, the seller, acts as an agent of the state, collects the money from the purchaser and remits the money to Texas. That only happens if Amazon has physical contact or nexus with Texas. Amazon does not have physical presence in Texas and thus does not have nexus.

If Amazon does not have physical contact or nexus with Texas (as is the case right now), Amazon is not required to charge the purchaser sales tax. Instead...

The Texas use tax is imposed on the purchaser, the person who buys the book from Amazon. The purchaser pays the tax to Texas directly.

The "pays Texas directly" is the issue, as I noted above. When Amazon is tasked with collecting the taxes, it is fairly simple for the state of Texas to "inspect" Amazon's books and see if they are doing as they should.

By contrast, it is not cost-effective and very difficult to ensure that each and every person within the state of Texas obeys the law.

Any way you slice it, Texas gets its money. Any way you slice it, the ultimate purchaser is the person/entity who pays the tax. Whether Amazon charges tax to the purchaser or whether the purchaser pays directly, the purchaser is still the one who pays and Texas gets its money.

One way is efficient for the state, the other is not.
For the individual, it actually does matter in another way. When the purchaser pays the state directly, they generally get to deduct that from their income as a tax payment. Sales taxes paid indirectly are often exempt or capped at a certain point. (yes, it varies by state)

I'm telling you - these are all facts. There is no argument here.

We are not disputing the raw facts, that is the thing. We are disputing your framing of the facts and the impact of those rules.

[PLAYER57832]

Don't stress it, TGD. At the very least, I'm sure some of us have learned a lot about politics and taxes and supposed loopholes.

Yes, most of us who are adults.