California use tax.

[RedB4Black]

Every state has a "use" tax. If you buy something within your state, you pay a "sales" tax. If you buy something from outside your state, you are legally required to pay a "use" tax. it doesn't have to be from out of the country, it could be from out of state. If I buy something from a shop in CA, I'm technically required to pay a "use" tax to the State of Texas in an amount that's basically equivalent to what the sales tax would have been had I bought it from an in-state retailer. There's generally little enforcement against consumers, but most businesses are regularly audited by the state for compliance.

OP looks to be screwed because there is documentation of a purchase that proved it was made and that no use tax was paid. Since CA is a fiscal mess, it doesn't surprise me they are looking for all sorts of revenue possible.

 

[steve_k]

I am so glad I live outside the US. Fuck the government whores, their hidden agendas and their bullshit.

 

[Chris6870]

I am so glad I live outside the US. Fuck the government whores, their hidden agendas and their bullshit.

Yea because other countries don't have any of those things.

 

[kiff]

California has the highest state tax rate in the Country now! And it doesn't matter how much they tax you, they'll aways have a budget problem, not just becausw the waste money, but because they have negotiated ridiculous retirement packages from union workers and state workers and we 're all paying for them to retire like kings, while we have to bust our asses to pay these huge tax increases!The state has no clue how they're going to be able to pay for it! I'm sure they'll find a way to tax the internet or toilet paper, etc...

yup, what's it like 1/2 a trillion now? I have a house in the bay area I need to sell, just waiting for the right time for the market comeback and before they start adding crazy new taxes for capital gains or whatnot

 

[Shark Diver]

Every state has a "use" tax. If you buy something within your state, you pay a "sales" tax. If you buy something from outside your state, you are legally required to pay a "use" tax. it doesn't have to be from out of the country, it could be from out of state. If I buy something from a shop in CA, I'm technically required to pay a "use" tax to the State of Texas in an amount that's basically equivalent to what the sales tax would have been had I bought it from an in-state retailer. There's generally little enforcement against consumers, but most businesses are regularly audited by the state for compliance.

OP looks to be screwed because there is documentation of a purchase that proved it was made and that no use tax was paid. Since CA is a fiscal mess, it doesn't surprise me they are looking for all sorts of revenue possible.

That is insane. It would really hurt internet sales if they ever enforced this across the board. I get why they would, but try selling a Bogner amp as a dealer in Ca. to a Ca. resident when they can get it for hundreds less from out of state. That is a driving force of internet sales - no sales tax. So again, I understand why they would/should - but to randomly enforce something like this is idiotic. Either 100% or not at all. And at the time of purchase, not 4 years later. Doesn't seem that this is a commonly know tax and definitely would effect buying decisions.

 

[Bob Savage]

That is insane. It would really hurt internet sales if they ever enforced this across the board. I get why they would, but try selling a Bogner amp as a dealer in Ca. to a Ca. resident when they can get it for hundreds less from out of state. That is a driving force of internet sales - no sales tax. So again, I understand why they would/should - but to randomly enforce something like this is idiotic. Either 100% or not at all. And at the time of purchase, not 4 years later. Doesn't seem that this is a commonly know tax and definitely would effect buying decisions.

Since our government generally doesn't seem to know how to run a business, I believe we're going to see this enforced across the board eventually.

 

[dooredge]

The internet sales tax is definitely coming down the pike. How soon, who knows, but it's coming: http://www.chicagobusiness.com/article/ ... s-tax-bill

 

[RedB4Black]

Every state has a "use" tax. If you buy something within your state, you pay a "sales" tax. If you buy something from outside your state, you are legally required to pay a "use" tax. it doesn't have to be from out of the country, it could be from out of state. If I buy something from a shop in CA, I'm technically required to pay a "use" tax to the State of Texas in an amount that's basically equivalent to what the sales tax would have been had I bought it from an in-state retailer. There's generally little enforcement against consumers, but most businesses are regularly audited by the state for compliance.

OP looks to be screwed because there is documentation of a purchase that proved it was made and that no use tax was paid. Since CA is a fiscal mess, it doesn't surprise me they are looking for all sorts of revenue possible.

That is insane. It would really hurt internet sales if they ever enforced this across the board. I get why they would, but try selling a Bogner amp as a dealer in Ca. to a Ca. resident when they can get it for hundreds less from out of state. That is a driving force of internet sales - no sales tax. So again, I understand why they would/should - but to randomly enforce something like this is idiotic. Either 100% or not at all. And at the time of purchase, not 4 years later. Doesn't seem that this is a commonly know tax and definitely would effect buying decisions.

A lot of states have a separate line on their state income tax forms to
collect sales tax on internet purchases during the year. California
probably has it. You are supposed to report the purchases and pay the tax
when you file your annual state income tax return. This is also a way they
can nail you in an audit if you don't report anything. They can just look
at credit card records for out of state purchases. Then you are screwed for
income tax evasion as well.

Cash strapped states are stepping up their efforts to generate revenues.
You should see what the statute of limitations for payment of use taxes is
in your state. It may be shorter than 4 years, in which case you can tell
them to take a hike. Be careful with that though, because they could start
digging through any other purchases you made.

 

[cyndicate]

Every state has a "use" tax. If you buy something within your state, you pay a "sales" tax. If you buy something from outside your state, you are legally required to pay a "use" tax. it doesn't have to be from out of the country, it could be from out of state. If I buy something from a shop in CA, I'm technically required to pay a "use" tax to the State of Texas in an amount that's basically equivalent to what the sales tax would have been had I bought it from an in-state retailer. There's generally little enforcement against consumers, but most businesses are regularly audited by the state for compliance.

OP looks to be screwed because there is documentation of a purchase that proved it was made and that no use tax was paid. Since CA is a fiscal mess, it doesn't surprise me they are looking for all sorts of revenue possible.

That is insane. It would really hurt internet sales if they ever enforced this across the board. I get why they would, but try selling a Bogner amp as a dealer in Ca. to a Ca. resident when they can get it for hundreds less from out of state. That is a driving force of internet sales - no sales tax. So again, I understand why they would/should - but to randomly enforce something like this is idiotic. Either 100% or not at all. And at the time of purchase, not 4 years later. Doesn't seem that this is a commonly know tax and definitely would effect buying decisions.

A lot of states have a separate line on their state income tax forms to
collect sales tax on internet purchases during the year. California
probably has it. You are supposed to report the purchases and pay the tax
when you file your annual state income tax return. This is also a way they
can nail you in an audit if you don't report anything. They can just look
at credit card records for out of state purchases. Then you are screwed for
income tax evasion as well.

Cash strapped states are stepping up their efforts to generate revenues.
You should see what the statute of limitations for payment of use taxes is
in your state. It may be shorter than 4 years, in which case you can tell
them to take a hike. Be careful with that though, because they could start
digging through any other purchases you made.

It's on the CA return, Line 95 of your 540. The point of Use tax is they are trying to level the playing field for CA sellers. If everyone could by stuff out of state tax free, then all the businesses in CA would hurt from it. Technically everyone is required to report use tax on all out of state purchases on your tax return, no one ever does it though. It's been a issue for awhile, and it's probably the easiest way to raise revenue for the state. Just getting Amazon to now require CA taxes for CA residents has probably brought in a ton of revenue for CA.

Statute is 8 years so you can't do anything about, best to just pony up and avoid interest/penalties before they assess any further. CA is one of the most aggressive states when it comes to tax, I see probably 10x more CA notices than from any other State, even more than the IRS lol.

 

[Mudder]

Just one more reason Oregon is awesome. No sales tax.

 

[Shark Diver]

Every state has a "use" tax. If you buy something within your state, you pay a "sales" tax. If you buy something from outside your state, you are legally required to pay a "use" tax. it doesn't have to be from out of the country, it could be from out of state. If I buy something from a shop in CA, I'm technically required to pay a "use" tax to the State of Texas in an amount that's basically equivalent to what the sales tax would have been had I bought it from an in-state retailer. There's generally little enforcement against consumers, but most businesses are regularly audited by the state for compliance.

OP looks to be screwed because there is documentation of a purchase that proved it was made and that no use tax was paid. Since CA is a fiscal mess, it doesn't surprise me they are looking for all sorts of revenue possible.

That is insane. It would really hurt internet sales if they ever enforced this across the board. I get why they would, but try selling a Bogner amp as a dealer in Ca. to a Ca. resident when they can get it for hundreds less from out of state. That is a driving force of internet sales - no sales tax. So again, I understand why they would/should - but to randomly enforce something like this is idiotic. Either 100% or not at all. And at the time of purchase, not 4 years later. Doesn't seem that this is a commonly know tax and definitely would effect buying decisions.

A lot of states have a separate line on their state income tax forms to
collect sales tax on internet purchases during the year. California
probably has it. You are supposed to report the purchases and pay the tax
when you file your annual state income tax return. This is also a way they
can nail you in an audit if you don't report anything. They can just look
at credit card records for out of state purchases. Then you are screwed for
income tax evasion as well.

Cash strapped states are stepping up their efforts to generate revenues.
You should see what the statute of limitations for payment of use taxes is
in your state. It may be shorter than 4 years, in which case you can tell
them to take a hike. Be careful with that though, because they could start
digging through any other purchases you made.

It's on the CA return, Line 95 of your 540. The point of Use tax is they are trying to level the playing field for CA sellers. If everyone could by stuff out of state tax free, then all the businesses in CA would hurt from it. Technically everyone is required to report use tax on all out of state purchases on your tax return, no one ever does it though. It's been a issue for awhile, and it's probably the easiest way to raise revenue for the state. Just getting Amazon to now require CA taxes for CA residents has probably brought in a ton of revenue for CA.

Statute is 8 years so you can't do anything about, best to just pony up and avoid interest/penalties before they assess any further. CA is one of the most aggressive states when it comes to tax, I see probably 10x more CA notices than from any other State, even more than the IRS lol.

Well, my fault. I have my taxes done, hadn't noticed it, and have never been asked. Sure would have changed my mind on getting it. Total fail on that. Didn't like the amp. Was sent the wrong cabs. Shipping. Import fees. And now this. I should have just gotten a Jet Ski,

 

[blackba]

IMO for internet purchases the state that has the business should get the sales tax. For example, if being a Michigan resident buy something from FL, I have to pay FL sales tax on that item. If the business has an operation in Michigan, than Michigan gets the tax.

 

[Chubtone]

IMO for internet purchases the state that has the business should get the sales tax. For example, if being a Michigan resident buy something from FL, I have to pay FL sales tax on that item. If the business has an operation in Michigan, than Michigan gets the tax.

This won't work as every internet sales company in the states would move to Oregon or any other state that doesn't charge sales tax. It has to be the buyers state gets the sales tax. Some states have much higher sales tax rates than others too.

Let's face it, it's been a fun few years of being able to skirt the sales tax on our internet purchases. We all knew we were avoiding our state sales tax in doing so. There's no way that could last forever.

Going back 4 years to bust Shark Diver is ridiculous though.

 

[rlord1974]

I don't know if personal income tax rules for professional musicians are the same in the U.S. (California) as they are in Canada, but if they are similar and you are allowed to claim depreciation (i.e., capital cost allowance) on musical instruments purchased to be used to earn income (i.e., from gigs), you could.....

1.) re-file your personal tax returns for the past 3 years (i.e., 2009, 2010 and 2011) and claim the depreciation on the Wizard. At, say, 5% of the cost per year, you're looking at saving about $200 per year (or $600 in total over the 3 years you re-file).

2.) when you re-file your 2011 tax return, report that you sold the Wizard during 2011 for cash proceeds which were less than the net of the purchase price of the Wizard minus the accumulated depreciation claimed over the 3 years you re-file (this will ensure that there will be no "recapture" on the sale of the Wizard that would need to be taken into taxable income in 2011).

3.) Happily pay the $400 they just billed you, knowing that you're actually better off now (i.e., $600 tax refund less the $400 you pay in use tax).

Make sense? Is there a U.S. CPA in the house that can translate my Canadian income tax rules to U.S. tax rules?

 

[rlord1974]

Caveat re: the above suggestion: it all goes to shit fast if you didn't claim a dime of income from gigging over the same three year period!

 

[cyndicate]

Caveat re: the above suggestion: it all goes to shit fast if you didn't claim a dime of income from gigging over the same three year period!

Paying a CPA to amend 3 years worth of tax returns would cost way more than the $400

 

[rockify]

Lemme get this straight: your state wants to tax you for using a product in the States that's not made in the States, and they're taxing you 4 years after you bought it?!

it seems, well, ridiculous.

That's what I was thinking..wtf?

America and their different tax and state laws baffle me

In Australia, getting taxed for practically everything..I can understand people learning how to bend the rules abroad without breaking them

 

[rlord1974]

Caveat re: the above suggestion: it all goes to shit fast if you didn't claim a dime of income from gigging over the same three year period!

Paying a CPA to amend 3 years worth of tax returns would cost way more than the $400

He wouldn't need a CPA to do it. It's easy to re-file. Copy the original tax return and simply add the schedule for claiming depreciation. Done.

Then again, it might be easier to just cough up the $400 and move on with one's life......

 

[cyndicate]

Caveat re: the above suggestion: it all goes to shit fast if you didn't claim a dime of income from gigging over the same three year period!

Paying a CPA to amend 3 years worth of tax returns would cost way more than the $400

He wouldn't need a CPA to do it. It's easy to re-file. Copy the original tax return and simply add the schedule for claiming depreciation. Done.

Then again, it might be easier to just cough up the $400 and move on with one's life......

True, but amending is a pain in the ass. I'm a CPA and I wouldn't even want to amend 3 years worth of shit unless it provided substantial savings without the risk of opening a can of worms, but then again most of my work now is consulting Hate dealing with compliance work.

It's definitely doable if you can justify it's not a hobby loss. Amending your return to claim a Sch. C loss however is probably a red flag to the IRS.

 

[Shark Diver]

Oh, I'm just going to pay it. Last thing anyone wants to do is have the Tax Police looking at you. No matter how clean you are it is still a pain in the ass.