California "Use" Tax?

mrearlygold

How will this affect the coin business in California ?

Use Tax

Retroactive to 2007 ??

PDF

claychaser

Probably not a whole lot. "Use" tax applies when a California resident or business buys something from out of state, typically by mail order. So, if I buy something from Cabelas, who does not have a nexus in CA, I'm supposed to pay the use tax (sames as the sales tax rate) on the items. One disadvantage is that a CA business that uses supplies purchased from out of state has to report and pay the tax. If you buy from a retailer with stores in CA (Wal-Mart, Staples, etc), they automatically charge the tax and you just pay it on the invoice.

Items purchased for resale, when you have a sellers permit, do not get taxed. But your supplies (say 2x2's and flips) do get taxed to you.

ProofCents

unless your a business "use tax" is rarely enforced

droopyd

So, am I to read into this that this affects businesses only and not individuals?

MrEureka

CA has a sales tax exemption for rare coin transactions over $1000. Logically, the $1000 threshold should apply to use tax as well. But things aren't always that logical. It's worth checking out.

mbogoman

<< <i>CA has a sales tax exemption for rare coin transactions over $1000 >>



It was raised to $1500 a couple years ago.

claychaser

<< <i>So, am I to read into this that this affects businesses only and not individuals? >>





No. The long arm of the Governator gets all of us. As an individual, if you purchase by mail order to an out of state seller, you are supposed to pay the use tax on the item if the merchant did not charge tax on it. There is a line on your CA income tax form for this.

One big profile case on this was the Tyco big-shot Dennis Koslowski, who evaded NY sales tax on expensive artworks and got nabbed when the Tyco scandal hit. Not CA, but its the same idea.

COINB0Y

It's spelled "Abuse" not "Use", I believe.......

coinpictures

Illinois has had a use tax for ages, which taxpayers have routinely ignored. Not any more. They are adding a line item to IL tax returns where you have to declare out-of-state purchases and pay use tax on all those where IL state tax was not paid. They are offering a one-time amnesty through October 15, 2011 to pay use tax retroactive to 2004. After that they will be going after everyone.

As they recognize that people most likely do not retain receipts/records, they've come up with a handy-dandy chart to use based on AGI in lieu of actual purchase records (that actually for someone who does a lot of online shopping would result in a lower use tax than actual purchases).

It's just a way of raising the state income tax without saying they are raising the state income tax.

As states circle the bowl at an ever-increasing rate, they will do more and more to tax the hell out of the citizenry.

It's only a matter of time until all online/mail purchases are subject to state income tax, regardless of locus.

BillJones

<< <i>unless your a business "use tax" is rarely enforced >>



Yes, it's one of those laws that gets enforced when they want to make an example of someone. I forget the state, there was woman who was smoker who had been buying cigarettes through the mail for years and in doing so had evaded the tobacco tax laws in her state. The authorities caught up with her and sent her a tax bill for something like $8,000. Since she was a retiree on Social Security and didn’t have much money, the bite on her was going to be very severe.

notwilight

I'm registered with the BOE and collect a few $ sales tax while doing "well over" the $100,000/yr limit quoted in the reference. Most of my sales are either out of state or over $1500 so I always expected them to question the very low sales tax that I report. The form requires I report total gross sales. But never a question.

As for the USE tax, I have received no communication from the BOE.

--Jerry

stevek

The United States Constitution

Article I Section 9 Clause 5

"No Tax or Duty shall be laid on Articles exported from any State."

To me, it's perfectly clear our Founding Fathers meant for there to be no taxes levied on purchases made between the states. But of course progressive government has found a way around this with the use tax.

Oh well...it's only the Constitution.

BAJJERFAN

<< <i>

<< <i>So, am I to read into this that this affects businesses only and not individuals? >>





No. The long arm of the Governator gets all of us. As an individual, if you purchase by mail order to an out of state seller, you are supposed to pay the use tax on the item if the merchant did not charge tax on it. There is a line on your CA income tax form for this.

One big profile case on this was the Tyco big-shot Dennis Koslowski, who evaded NY sales tax on expensive artworks and got nabbed when the Tyco scandal hit. Not CA, but its the same idea. >>



Got smoe publicity for John Kerry too!!!