ee163agb@sdccs7.UUCP (05/24/84)
<- bug snack A state sales tax is typically collected from merchants for efficiency. The tax is on the buyer, but the merchant is required to collect it and remit it to the State. The MERCHANT'S state. This should also clarify something: in an interstate transaction, the home state of the *buyer* is the one that can't get at the merchant, the seller's state has him perfectly under their power. It isn't any more difficult, efficiency wise, for the seller's state to tax out-of-state buyers than any other kind. Even though the tax is on the buyer, the buyer's state doesn't collect it: they don't follow their citizens around to collect taxes on purchases they make in another state. Note that states routinely collect sales tax on purchases made by *anyone* INSIDE their borders, not just out-of-staters, even aliens and diplomats. The reason mail-order firms usually don't collect sales tax on out-of-state sales, though, is more than a matter of efficiency. When a merchant sells something to someone in another state, then he is engaged in ``interstate commerce,'' and no state (at least, not without the special permission of congress, and then it'd have to be worded just right) can tax interstate commerce: that's unconstitutional. ``Then,'' you may ask, ``why do some firms collect taxes on these apparently interstate sales?'' The answer is twofold. 1) Some firms' accounting methods do not permit them to distinguish interstate from intrastate activity and they must therefore, for their own purposes (staying in the good graces of their local tax authorities), collect taxes from everyone. Note that this might be unlawful... but don't try making trouble, they don't have to sell to you. 2) Some businesses are responsible to the tax authorities in several or many states. Any merchant who ``does business'' in a state may be required to remit the appropriate tax on sales inside that state, *even though* the order may have been filled through a facility in another state. This is what's going on with AT&T UN*X licenses; AT&T does business in every state. The notion is that the commerce was *intrastate* even though part of its mechanics were interstate. Purchases from mail order firms without offices in a given state are strictly INTERstate commerce. The courts have allowed state authorities to attack, through lawsuits and other means, the nasty practices of companies in other states that do business with residents of their state. This is in their capacity as the guardians and corporate representatives of their citizens. Even more recently, the courts have allowed people to sue out-of-state entities in their home-state courts, if the out-of-state firm, despite the fact it isn't ``doing business'' in the home state, nevertheless has substantial business dealings with people there. The first practice doesn't have any tax ramifications, it's just your state (attorney-general, usually) looking out for you, like your mother. The second, though, represents an erosion of the privileges of merchants in interstate commerce, who formerly had to be sued in U.S. courts. Perhaps taxing interstate sales will eventually be permitted. California, interestingly enough, does have a very fine scheme for taxing interstate or transnational firms, ON THEIR INCOME, called the ``unitary'' tax. This means that transnationals cannot use the usual sort of accounting fraud to move all their income out of state to the Cayman Islands or somewhere like them where it won't be taxed. California taxes firms on the basis of their income *anywhere*!! (Though very gently. This state has one of the lowest corporate income taxes.) This tax does not run afoul of the interstate commerce provisions of the Constitution, because it does not affect commerce. A tax on sales IS a tax on commerce. A tax on income has no direct effect on trade. bookmark
tierney@fortune.UUCP (06/01/84)
#R:sdccs7:-123300:fortune:29600006:000:529 fortune!tierney May 31 13:01:00 1984 ***** fortune:net.legal / sdccs7!ee163agb / 9:22 pm May 23, 1984 <- bug snack > Note that states routinely collect sales tax on > purchases made by *anyone* INSIDE their borders, > not just out-of-staters, even aliens and diplomats. Oh, ho! Gotcha': A minister (with the appropriate credentials) is generally granted the right NOT to pay state sales tax. (Verified in Conn., Mass., Calif.) Charlie Tierney -------------------------------------------------------------- { hpda harpo ihnp4 cbosgd } !fortune!tierney
cwc@mhuxd.UUCP (Chip Christ) (06/01/84)
Is the clergy exempted PERSONALLY from paying sales tax, or, as in NJ, is the church granted tax-exempt status as a non-profit organization? A member of the clergy who makes personal use of his church's tax-exempt number is cheating. For shame! Chip