The Internet tax. Starting in 2009?
A reader named Caitlynn asked during my live chat Friday if Internet purchases from out-of-state retailers will be taxed starting in 2009. Right now retailers do not charge tax if the purchaser lives in another state.
There are no plans to start charging an Internet tax Jan. 1, 2009. But an Internet tax could take effect later in the year if Congress makes a new law.
Supporters argue that tax-free Internet purchases create a loophole that cuts Uncle Sam out of potential revenue and it gives online retailers an advantage over brick-and-mortar stores. Foes say they are already taxed plenty.
Some speculate that a Democratic controlled Congress will take another look at the Internet tax, especially considering that so many states are facing budget shortfalls.
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About The Bargain Hunter
Daily News staff writer Julia Scott loves to find bargains on everything from groceries to Gucci. Her tips will help keep your hard earned cash where it belongs - in your pocket.
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A wet SO_CAL_RETAIL_SLUT here...lol!
As an FYI, on your California state income tax return, you are required to report ANY out of state purchases that you made the previous year and pay the applicable tax charged in your locality, in my case, Santa Clarita, it's 8.25 percent.
I wonder how many returns actually include payments for out of state purchases. I don't remember hearing or seeing a number, but I bet it's low.
Since the Bargain Hunter is now national throughout Dean's Media News Group empire, others may be able to share how their state handles the taxation on out of state purchases.
By the way, how waS the live chat? Any feedback from your editors? I thought it was great way to take advantage of new and emrging technologies, for very little cost. Dean and Carolina should be happy, something for nothing!...LOL
SO_CAL_RETAIL_SLUT
Thanks for pointing out the finer details of Internet taxes, SCRS. As for the live chat, I got a great response from editors and other reporters. Thanks for participating! ~Julia
well i know when i buy from walmart and other places i always get charged tax so i would like to know where your shopping so i can save more
Online retailers that do not have brick and mortar stores, like Amazon.com. ~Julia
Clarification: If a company has a "brick and mortar" in California, they are required to charge CA sales tax based on the location of their store or warehouse, even if they are selling from a location in another state. This is true for internet sales AND catalog sales. "Wise" shoppers have been saving tax for years before the internet, by purchasing from an out-of-state catalog.
This is why you are paying tax when you shop online at Wal-Mart, Costco, Sam's, Sears, etc, etc. Internet sites from other states with no physical connection to CA do NOT charge sales tax. Also, catalogs like Sportsmen's Guide, Heartland America, etc do NOT charge tax.
Dave,
Thanks for clarifying. ~Julia
I wasn't clear enough regarding the reporting of and payment sales taxes on your tax return, I should have said that you are supposed to report and pay taxes on those out of state sales where you were not charged sales tax, whether brick and mortor in states like Oregon (no sales tax) or Minnesota (no tax on clothing), or over the internet such as as Amazon, etc.
As others pointed out, some on-line only reatailers do charge tax as well as others like Costco, Sears, Wal-Mart if they have a "presence" in California such as a warehouse, retail store and/or corporate office.
I'm sure we will be hearing more about the sales tax issue in the coming months as state officials will attempt to "educate" Californians about the "loss" of revenue for all of our out-of-state shopping that wasn't taxed, and we haven't been good girls and boys by submitting the tax to our lovely state...lol
SO_CAL_RETAIL_SLUT
Again I ask, who is Dean that the Slut often refers to?
Perhaps you did not see that I responded to a similar question on another post. Dean is Dean Singleton, who owns the LA Daily News and dozens of other newspaper in the Media News Group chain. ~Julia