Sales Taxes on Web Purchases
Vic Smith
Noticed my $10.00 refill cost $11.01, which reflects the local sales
tax rate. Cook County, IL.
The refills weren't taxed a couple years ago.
Seems some web purchases add the tax, others don't.
Anybody know what's going on with this?
Wonder how it will affect web sales.
--Vic
Dave Garland
The flip answer, of course, is that Blago wants his share ;->
In general, in the US, you're supposed to pay state sales ('and use')
tax even on things purchased from another jurisdiction. For the most
part, businesses that have any office/store/etc. in your state must
charge tax, even if you buy online. Otherwise, you're supposed to
report it when you do your state income tax. Though I suspect that
outside of big-ticket items and things like automobiles that require
government registration, compliance is less than 100% :) Perhaps very
much less.
<TINFOIL HAT>It wouldn't surprise me if the "fatherland security"
excuse to make banks and financial institutions share data with the
government didn't lead to states finding out more about your purchases
and demanding their cut.</TINFOIL HAT> Nah, governments would never
do anything like that.
http://www.callingmart.com/ doesn't charge tax (I assume that their
physical location is somewhere there isn't a sales tax, or else they
eat the tax). And the $10 T-Mobile refill I bought from them a few
days ago cost $9.30.
Dave
Vic Smith
Thanks for all that info.
Do T-Mobile refill minutes bought on this site have the same 365 day
expiration (Gold Rewards) as on the T-Mobile site?
Seems weird that T-Mobile would sell refills to a reseller.
To what advantage for them?
Are these minutes easily added to your T-Mobile account?
--Vic
Brian Elfert
>Just did a yearly T-Mobile refill.
>Noticed my $10.00 refill cost $11.01, which reflects the local sales
>tax rate. Cook County, IL.
>The refills weren't taxed a couple years ago.
>Seems some web purchases add the tax, others don't.
Legally, all of your purchases are subject to either sales or use tax if
your state has a sales tax.
Internet/telephone/mail order companies cannot be required by law to
collect taxes for a state if they don't have an office or some other
physical location in that state. T-Mobile almost certainly has a store,
kiosk, or office in Cook county. Heck, a cell tower they own could
probably be considered a physical presence.
You still owe use tax on any purchase where sales tax is not collected.
Most folks consider online/mail order tax free, but they are not really
tax free. It is just unlikely the average person will be audited for use
tax violations.
Some states only require payment of use tax if you buy more than $750
worth of goods in a year, but it isn't hard to to spend $750 online. Your
state income tax form may even have a line for declaring the use tax you
owe.
Dave Garland
> Do T-Mobile refill minutes bought on this site have the same 365 day
> expiration (Gold Rewards) as on the T-Mobile site?
They are the same as time purchased from T-Mobile or another retailer.
> Seems weird that T-Mobile would sell refills to a reseller.
They also sell T-Mobile refill cards at K-Mart and Target (and
probably other places that sell phones). Target sometimes has them on
sale, but you'll have to pay the local tax if you buy there.
> To what advantage for them?
Probably to make it easy for you to use (and buy) more time. I rather
suspect that most people buy much much more than $10/year. Some
people need (or choose) to buy for cash, as they may not have a credit
card, or don't want to leave a paper trail. Some don't have Internet
access (and prudently choose not to enter a cc number via a possibly
insecure computer in a library or other public place).
And I imagine that even at a substantial discount, the profit margin
is huge, once T-Mobile has recouped their subsidy on the phone itself.
> Are these minutes easily added to your T-Mobile account?
Yes, just dial the appropriate number (I don't remember what it is,
star-something, but they'll tell you in the email that provides the
PIN number), and enter the PIN number.
Dave
The Real Bev
> On Sat, 10 Jan 2009 13:23:16 -0600, Dave Garland
>
>>http://www.callingmart.com/ doesn't charge tax (I assume that their
>>physical location is somewhere there isn't a sales tax, or else they
>>eat the tax). And the $10 T-Mobile refill I bought from them a few
>>days ago cost $9.30.
>>
> Thanks for all that info.
> Do T-Mobile refill minutes bought on this site have the same 365 day
> expiration (Gold Rewards) as on the T-Mobile site?
Once you've paid your $100 everything is good for a year from your last refill.
And you get 15% extra minutes, too.
> Seems weird that T-Mobile would sell refills to a reseller.
> To what advantage for them?
> Are these minutes easily added to your T-Mobile account?
I buy a $10 card once a year at Target because I get Target gift certificates
for clicking on ads. I can't remember if they charge sales tax on it or not. A
refill card is a refill card, it doesn't matter where you bought it. You don't
even have to buy a refill card, you can just add minutes with a phone call and a
credit card.
This probably explains why so few people give significant discounts.
--
Cheers,
Bev
================================================================
"Everything sucks; reverse the wires and everything will blow."
-- Desert Ed
Vic Smith
<bashl...@gmail.com> wrote:
>Vic Smith wrote:
>
>> On Sat, 10 Jan 2009 13:23:16 -0600, Dave Garland
>>
>>>http://www.callingmart.com/ doesn't charge tax (I assume that their
>>>physical location is somewhere there isn't a sales tax, or else they
>>>eat the tax). And the $10 T-Mobile refill I bought from them a few
>>>days ago cost $9.30.
>>>
>> Thanks for all that info.
>> Do T-Mobile refill minutes bought on this site have the same 365 day
>> expiration (Gold Rewards) as on the T-Mobile site?
>
>Once you've paid your $100 everything is good for a year from your last refill.
> And you get 15% extra minutes, too.
>
>> Seems weird that T-Mobile would sell refills to a reseller.
>> To what advantage for them?
>> Are these minutes easily added to your T-Mobile account?
>
>I buy a $10 card once a year at Target because I get Target gift certificates
>for clicking on ads. I can't remember if they charge sales tax on it or not. A
>refill card is a refill card, it doesn't matter where you bought it. You don't
>even have to buy a refill card, you can just add minutes with a phone call and a
>credit card.
>
>This probably explains why so few people give significant discounts.
The discounting is what surprised me. Good to know if you use a lot
of T-Mobile prepaid minutes. Until Dave pointed out otherwise, my
mindset was that T-Mobile prepaid was mostly used by those who
didn't use many minutes.
When I did the $10 refill to keep my unused minutes my prior year's
use was.....10 minutes.
--Vic
The Real Bev
>>>
>>>>http://www.callingmart.com/ doesn't charge tax (I assume that their
>>>>physical location is somewhere there isn't a sales tax, or else they
>>>>eat the tax). And the $10 T-Mobile refill I bought from them a few
>>>>days ago cost $9.30.
>>>>
>>> Thanks for all that info.
>>> Do T-Mobile refill minutes bought on this site have the same 365 day
>>> expiration (Gold Rewards) as on the T-Mobile site?
>>
>> Once you've paid your $100 everything is good for a year from your last refill.
>> And you get 15% extra minutes, too.
>>
>>> Seems weird that T-Mobile would sell refills to a reseller.
>>> To what advantage for them?
>>> Are these minutes easily added to your T-Mobile account?
>>
>>I buy a $10 card once a year at Target because I get Target gift certificates
>>for clicking on ads. I can't remember if they charge sales tax on it or not. A
>>refill card is a refill card, it doesn't matter where you bought it. You don't
>>even have to buy a refill card, you can just add minutes with a phone call and a
>>credit card.
>>
>>This probably explains why so few people give significant discounts.
>
> The discounting is what surprised me. Good to know if you use a lot
> of T-Mobile prepaid minutes. Until Dave pointed out otherwise, my
> mindset was that T-Mobile prepaid was mostly used by those who
> didn't use many minutes.
That would be me. $10/year keeps me alive. Right now I have 799 minutes and am
about to add 30 more.
> When I did the $10 refill to keep my unused minutes my prior year's
> use was.....10 minutes.
I've used 106 minutes since I refilled last February and 100 minutes the year
before. Real blabbermouth.
--
Cheers, Bev
++++++++++++++++++++++++++++++++++++++++++++++
666øF -- the oven temperature for roast beast.
h
"Shawn Hirn" <sr...@comcast.net> wrote in message
news:srhi-701E8C.0...@adsl-99-136-209-74.dsl.tpkaks.sbcglobal.net...
> In article <h2qhm4p8m27egbepg...@4ax.com>,
> community, it is required by local law to charge sales tax, even for web
> purchases.
Actually, it's the state, not just the community. Because I am physically
located in NY I have to charge sales tax on any web purchase shipped to any
NY address, not just the ones shipped or picked up locally. However, I
charge no sales tax on any purchases shipped to other states or other
countries.
Seerialmom
wrote:
At this point it usually depends on where you live and whether the
company has a "presence" in your state (if they have brick/mortar
stores). States are pushing for sales tax collection for web sales
because they're hurting for tax revenue. In California "technically"
you're supposed to claim "use tax" on your taxes if you buy something
outside of the state, too (but who keeps track when you pay cash just
over the border in Oregon?).
Vic Smith
Yes, others have said the same.
But I think some web sales firms are collecting the buyer's
state/local taxes even when they have no presence in the buyer's
state, and others aren't. Just seems I've noticed that, and I'm not
sure.
Okay I looked at some of my web order receipts, which I save to disk.
I'm in Illinois.
QVC is charging me sales tax. (HQ in PA)
Cracker Barrel charged no tax (I know they have stores in Illinois)
There's some inconsistency there, and I'm not sure why.
I think the state taxing bodies are working with some web sales
companies to collect taxes, or vice versa.
But as I said, I don't have a real handle on it.
In any case, I can see the automatic tax collection angle from both
sides, and don't have a strong opinion about it.
--Vic
Vic Smith
Forgot to add, I checked the T-Mobile refill I got in August 2008 for
my wife's phone. Same website, but no tax charged.
Yet on Jan 10, 2009 they charged tax.
They do have plenty of brick/mortar presence her.
But they did in August too.
Something to ponder anyway. I think states are cracking down on some
web companies, and "coercing" them to apply the tax according to
customer address. Or some companies are just doing it preemptively.
Just a guess, though.
--Vic
Dave Garland
> In any case, I can see the automatic tax collection angle from both
> sides, and don't have a strong opinion about it.
Aargh, as somebody who sometimes has to collect tax, I do. There are
something like 40,000 different taxing jurisdictions in the USA. They
all have different rules about how much, what the tax applies to, what
form you need to fill out, where to send the money. Even in the local
area where I live, there's, lessee, 1) state tax (6.5%); 2) countywide
tax for rich sports team owner (0.15%); 3) city tax (0.5%); 4) metro
area transit/road tax (0.15%). Fortunately, I report them all on the
same one form and the state divvies up the money, but I need to keep
the records about how much for each. There is *no* easy way to tell
where any particular address falls in this mess, the taxes do not go
along zipcode boundaries.
Now, multiply this by thousands of other greedy taxing authorities
around the country. If I did a significant mail-order business, I
could quite honestly spend all my time just sorting out the sales taxes.
If we're going to collect taxes for this crap, the government(s)
should be required to 1) all agree on exactly what is taxable and what
isn't (here, a pint bottle of water is taxable, but not a gallon
bottle); 2) all agree on a single rate of taxes to be charged on
purchases; and 3) provide a single address to which I can send a check
along with a printout of, say, amounts and zipcodes, and they (not me)
take responsibility for sorting out who gets what.
You touched a nerve there ;->
Dave
Brian Elfert
>I'm in Illinois.
>QVC is charging me sales tax. (HQ in PA)
>Cracker Barrel charged no tax (I know they have stores in Illinois)
Some companies have formed seperate companies that run their web site.
They have done this in part so the web company doesn't have to collect tax
in as many states.
If a ecommerce company hosts their web site on a company owned server
located in a third party data center in another state, do they have to
collect tax for that state?
h
"Dave Garland" <dave.g...@wizinfo.com> wrote in message
news:GoGdnUeCga6QPfPU...@posted.visi...
Yup. Years ago, when I did the fair circuit, I used to have to collect sales
tax in 5 different states, with different tax amounts and different
reporting requirements (monthly, quarterly, annually). However, NY was the
only big problem. The forms for the other 4 states were pretty straight
forward, one side of one sheet, and could be filled out in a few minutes. NY
had different taxes for each county as well as different rates for different
items, and you had to break down all amounts for each county on the 6 page
8綞11 form. It took about 5 hours to fill out the form and check it against
my figures. It almost never came out to the penny. I had to do this 4 times
a year. Now that I don't travel it's SO much easier to do the taxes. I only
have to fill out the forms for my county in NY, since all NY sales are
considered to be from my county. I still have to break out the two different
rates, but it's still MUCH easier.
This is on top of the time required to record all the info at the time of
the sale and then log it in the computer later at home so I'd have all the
info at tax time.
I wouldn't mind collecting and remitting sales tax on internet sales, but it
would have to be streamlined. Expecting small businesses to charge and remit
taxes to individual counties or even states is insane.
Applying for the sales tax license is a hassle and usually has a $25 fee.
That's $1,225.00 for the 49 other states (assuming you only have a license
in your home state). Then there's the many hours of sorting out individual
forms and making sure that you don't miss a deadline. Failing to file a tax
form even if no tax is due results in a $50 fine. Requiring small businesses
to collect sales tax on internet sales could put a lot of us out of business
unless it is implemented uniformly.
Dave Garland
> Applying for the sales tax license is a hassle and usually has a $25 fee.
At least Minnesota has got that part right. It's a one-sheet form,
and doesn't cost anything to register.
Dave