Goodies to Go (tm)
January 22, 2001-- Newsletter #114
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Goodies to Go (tm)
January 22, 2001--Newsletter #114
This newsletter is part of the internet.com network.
Please visit http://www.htmlgoodies.com
Did you hear...
Remember a few newsletters back when I discussed Yahoo! and an auction dealing with Nazi memorabilia? Well, a decision has been made to simply disallow any Nazi, or other hate-related items, to be auctioned on the site. I agree in principle, but I think the site will need to make a big point of stating what they consider "hate-related material". Most of hate-related material is obvious, however, some isn't. Some people consider the peace symbol hate-related. They see it as an upside-down broken cross. The new limitations go into effect January 10th.
Want a Power MAC but never could afford one? Try buying one now. Many models, including the new Cube, are being sold off to make room for the newer models. Go, go, go...
PC people are also getting a price break of sorts. Some of the lower cost PCs are getting bigger chips. Look for the 800-MHz Celeron processor to start showing up in the more affordable models.
I saw a story on my favorite morning show about wireless technologies. A lot of wireless technology is beginning to be targeted by virus producers. Cell phones were mentioned in particular. If you get an email on your Internet-ready cell phone and don't know the user, maybe you shouldn't open it. Heck, the way things are today, maybe you shouldn't open any email. Just make a phone call to the person who sent it...in a restaurant...sitting next to me. Be sure to talk loud enough that I can hear you.
Now onto today's topic...
January first was a big day in the Burns household. It's more than just the first of the year. It's deduction day.
[Party horn blast sound effect here]
Over the course of every year, we have a giant file that receives every receipt, and statement, and every bill that might be deductible. This includes all house payments including electric and heat. We have a home office now and can take a portion of those bills as a deduction.
On January first my wife and I crack open the file. She puts the stuff in like piles and I copy it all down into a spreadsheet. It took us close to six hours this last time around.
My wife's and my year-end taxes are a nightmare. I have two incomes, she has two incomes, and now we have the business. My accountant knows to block out a good part of the afternoon in order to not get audited year after year.
Thank goodness I don't have to worry about all those purchases I made over the Internet. Those won't be taxed. I bought them out of state and I don't have to worry about them.
Oh wait...yes I do. And so do you...maybe.
I'm going to base my discussion here on what is affecting Louisiana and 11 other southern states because this is what is affecting me. You may want to see if this also affects you and where you live.
So...you buy something on the Web and it comes from outside of your state. That falls under the Interstate Commerce law and the seller does not charge you any tax. You get the item, open it, and giggle at the taxman. You beat him! Bwa ha ha ha!
Have you ever heard of the "Use Tax"?
I hadn't until I began investigating exactly what would be required for my wife to open an Internet business in Louisiana. One of the first questions the helpful tax assessor asked was if I intended to sell what we were going to import. I said I was, he nodded and went on.
"Wait," I said, "Why did you need to know that?"
My wife kicked me under the table. Apparently it's best to not ask too many question when sitting across from a taxman.
He proceeded to tell me that if I were importing for my own use that I would be charged a "Use Tax". You see, the government is going to get their money one way or another. Either my business pays tax for the use of an item, or I pay tax when I sell the items. Get it?
Well, now that thinking is being applied to persons purchasing over the Web. Many local governments are losing sales tax money because of people buying over the Internet. Places that have a high sales tax to balance out lower property and school taxes, like Louisiana, are losing money hand over fist.
Louisiana has joined the "Southeastern Association of Tax Administrations." It's a group of twelve states that plan to notify one another of purchases made from their state. You can pretty much pick out the states if you think about the southeastern corner of the U.S.
Again, just because you live in Oregon doesn't mean there isn't going to be something like this in your area. Ask a tax advisor because this year the governments are serious. Louisiana intends to undertake a rather large advertising campaign informing people that tax will be due on items purchased from out of state. There will be a line on the tax form where you are to report how much you spent and pay tax upon it. It's now the law and that means big penalties if you skip it.
"Ha ha!" you exclaim, "I'll simply lie!" I'll say I spent a grand total of $50 on the Web this year when I really spend $1000. They'll never know!"
Well, maybe they won't, but maybe they will. There's a reason why a coalition between states was formed. The states can pass information between each other. If some guy in Alabama says he only bought $10 of stuff over the Web, his name can be run through the state's databases of sales over the Web. You may only be tracked if you are audited, but are you willing to take that chance? I'm not. Luckily, because of my big deduction file, I actually have all the receipts of everything I purchased over the Web. I can tally the number to the penny.
I went to find the percentages for a few states and was fairly successful. I found the tax form for Louisiana very quickly. The state taxation Web site offered the worksheet. It wasn't much. Here it is in a nutshell: How much did you spend out of state over the Web? Times it by .08. Send that to us.
Gosh. It was much lower in other states with a differing tax system. Louisiana relies heavily on sales tax.
So that's about it. If your state is participating in the use tax payment plan then you owe. If your wondering how states can get away with this while the Internet Tax Moratorium is still in place, you've not read the moratorium. That only disallows any new taxation. The use tax isn't new.
If you're looking for an up side to the use tax, it is that the tax will be used for local governments. I'm not against paying fair taxes to my local government simply because I can see my money at work and I can go sit in a representative's office and complain if I don't like how money is being spent. I want my firemen paid well. I want my police officers paid well. I want teachers paid well. I want the sewer workers and the garbage collection people paid well. I want them to be happy they chose a life of civil service. That's what a local tax does best. It makes for a better local life.
So now it's up to you. Will you tell the truth when the use tax line comes up on the local forms?
That's That. Thanks again for taking the time to read.
Joe Burns, Ph.D.
And Remember: Right in the middle of this newsletter I felt a graphospasm. I had scrivener's palsy. Those are two early terms for what we today call Writer's Cramp.
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