I owe a California Use Tax? WTF?!!!

Fear Itself said:
The State of Massachusetts sued a tire retailer that had stores in NH and MA to collect MA sales tax on MA residents who crossed the border to buy tires in NH. They lost.
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Good. I find it appalling that an auditor from one state's taxing authority even has a right to sniff around at any retailer in another state that didn't even step foot in the former state's soil. It warrants a hardy GTFO. The people that bought the tires are liable......even if it's harder to track the consumers, that's exactly who and where they should be going. Lazy ass bastards (MTA)......either sniff out and be punitive with your own residents or be more become more competitive tax-wise with your neighboring states.

We as a nation can choose how much taxes we pay and services we receive just by packing up a u-haul and moving from one state to another in search of bigger and better opportunities and I really don't see much difference here. The same also happens when people immigrate here or leave, regardless of the legality of it. Businesses even do it to maximize their bottom line and their competitiveness. It happens. A long term solution for Massachusetts should be that they really take a deep look at how efficient their government is as well as their services and find ways to be more competitive.....create more bang for the buck so to speak. Shaking down stores beyond their borders is taking a realization that you can't handle your internal issues.

Being one of the smaller states (where a half hour drive each way to save $40 in tax) is a problem that you should have forseen and taken into account from day one if you're any legislator or taxing authority. React accordingly you idiots.
 
Really Not All That Bright said:
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.
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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.
 
magellan, do you make more than $100,000 (from mother knob slobbing or whatever, only the IRS cares about the source)? My sources say that that's one of the FTB's "red flags" to threaten you over use tax.
 
thelurkinghorror said:
magellan, do you make more than $100,000 (from mother knob slobbing or whatever, only the IRS cares about the source)? My sources say that that's one of the FTB's "red flags" to threaten you over use tax.
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Yes. But I'm curious as to what triggered this right now. When I finally hear back from the number I called I'm going to ask them. I'll pass on the info.
 
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.
 
magellan01 said:
Yes. But I'm curious as to what triggered this right now. When I finally hear back from the number I called I'm going to ask them. I'll pass on the info.
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Have you seen our state's budget? That's what triggered this. Someone realized that they haven't been pushing use tax collection, and that they could make a few extra bucks if they did. It isn't something you did, you just got unlucky. I think all my clients but 3 got hit with these this year.
 
You know why you were charged the Use Tax?




Gay marriage. You finally found the unforeseen consequence! :eek:
 
Funny you should mention "all these taxes" when we have Prop 13 on the books which is keeping property taxes artificially low, depriving local and state government of billions of dollars in funding.
 
magellan01 said:
Well, in essence, this really was a serious question about something I had not heard about. For all I know me accountant has been paying this. I'm going to ask him tomorrow. But, yes, I did ask the question in the Pit, and yes, I did rant a little. Partially because I was surprised by it and partially because I'm sick and tired of paying as much tax as I do. So, I do not begrudge you spewing some shit my way. Especially since you offered some insight in the process.

I guess the one thing I don't get is why, after I posted a question and openly admitted I knew NOTHING about this (i.e. that my ignorance on this topic was, on a scale of 1 - 10, an 110, why you felt the need to point to the very ignorance I announced with fireworks in the OP.

Like I said, I don't mind your insulting me in the pit, it just seem odd that you would think that the thing I already admitted to would be so cutting.

::shrug::
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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.
 
Update:

I just got off the phone with tax people. Evidently almost 197,000 letters went out last year and almost 300,000 will be going out this year. I asked her why I might have received it and she said that they were flagging people who:

1) provide a service
2) make over $100,000
3) file 1099s

She registered me online and said I will receive an account number via email, which I will then use to pay the tax online. She also said to make sure that my accountant did NOT pay it in my normal filing, as it had to go through the ID number I'm being issued. And I have to pay for 2008 and 2009, and of course, going forward.

In the end, it's not that big a deal. I was really concerned that they'd have me go back 8 years, as they said they can do, via an audit (:eek:) in the letter.

Thanks for all the info the helpful of you have provided.
 
Every state I've ever lived in also has a use tax for out of state internet purchases. I wish they'd just make Amazon collect local sales tax as I feel like a sucker because I'm one of the only ones who actually pays it. Why? Because I'm scared that the one time I don't, I'll get audited and busted. Plus, it only comes to ~$80 a year, so it's not that big of deal. I just hate paying it when everyone else is getting away with not paying. Either enforce the law for everyone, or take it off the books.
 
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...
 
magellan01 said:
She registered me online and said I will receive an account number via email, which I will then use to pay the tax online. She also said to make sure that my accountant did NOT pay it in my normal filing, as it had to go through the ID number I'm being issued. And I have to pay for 2008 and 2009, and of course, going forward.
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The online system is easy to use and works well also, something that is not normal for CA online processes.

And as not your tax advisor, I would again like to invite you to tell all the people in this thread who called you an idiot to suck it, then refer them to the above quote.
 
I'm not calling him a retard for not knowing the proper route. I'm calling him a retard for having never even heard of the idea that he might need to pay sales tax on items he purchased from out-of-state vendors.

Also, he's a piece of racist trash. So that colors my opinion somewhat.
 
The use tax itself is absolutely standard, as other have said, but this is the first I've heard of a state trying to actually enforce it on some non-specific basis (it's common for states to search yacht registries etc. to look for big-ticket items purchased out of state).
 
Really Not All That Bright said:
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.
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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.
 
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