On Jan 23, 6:00*pm, "Paul Rigg" wrote:

Different sales tax rates apply to different goods in my state.

Not a reason not to include them in the price. My point was that if
customer X enters the shop, then customer Y enters the shop, and both
buy the same thing, both would be charged the same for it?

Neil

On 23-Jan-12 11:26, Neil Williams wrote:
On Jan 23, 6:00 pm, "Paul Rigg" wrote:
Different sales tax rates apply to different goods in my state.

Not a reason not to include them in the price. My point was that if
customer X enters the shop, then customer Y enters the shop, and both
buy the same thing, both would be charged the same for it?

Not in the US, unfortunately. There are various buyers that do not have
to pay sales taxes, either at all or for certain uses. So, even
customers who buy the same things in the same place may not pay the same
tax.

The more logical solution would be for everyone to pay the tax and for
exempt buyers to get a credit/refund. That would also seem to be less
susceptible to fraud while greatly simplifying things for merchants.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking

Stephen Sprunk wrote:
On 23-Jan-12 11:26, Neil Williams wrote:
On Jan 23, 6:00 pm, "Paul Rigg" wrote:

Different sales tax rates apply to different goods in my state.

Not a reason not to include them in the price. My point was that if
customer X enters the shop, then customer Y enters the shop, and both
buy the same thing, both would be charged the same for it?

Not in the US, unfortunately. There are various buyers that do not have
to pay sales taxes, either at all or for certain uses. So, even
customers who buy the same things in the same place may not pay the same
tax.

That really doesn't affect a lot of buyers:

In my state, units of government and schools (not non-school educational
organizations) and churches and charities are exempt from sales and
use taxes.

It's not an exemption as there's no VAT in the United States, but sometimes
goods for resale are purchased at retail stores and not from wholesalers
or distributors or from the manufacturer. The reseller does not pay sales
tax to the retail store as it's not a retail transaction.

The more logical solution would be for everyone to pay the tax and for
exempt buyers to get a credit/refund. That would also seem to be less
susceptible to fraud while greatly simplifying things for merchants.

That's a load of crap. You want the merchant to handle monies that have
to be refunded, eventually, claiming it's simpler.

I was a cashier as a kid. We had electronic cash registers many years
ago. With the push of a button, there was a way to ring up a non-tax sale.
The cash register would report aggragate non-tax sales, which would be
entered into the books. No, not collecting the un-owed tax didn't impose
an additional burden because there's already bookkeeping associated with
inventory and sales and tax collection.

The buyer or reseller would then have to save his receipts; that's a burden.
He'd have to file a form with the state for rebate; that's a burden. The
state would have to process forms from a great many non-taxpayers who
aren't currently filing forms. That's a burden. The state would have to
issue the rebates. That's a burden.

In the meantime, the non-taxpayer is without money he never owed to
the state in the first place. That's a huge burden, especially if you're
talking about a cash-poor charity.

You don't know what you're talking about.

That's a load of crap. You want the merchant to handle monies that have
to be refunded, eventually, claiming it's simpler.

Yeah, it's simpler. I have both a NY sales tax merchant account and a
Canadian GST account. The GST is much easier to deal with.

What's your experience with VAT?

R's,
John

John Levine wrote:

That's a load of crap. You want the merchant to handle monies that have
to be refunded, eventually, claiming it's simpler.

Yeah, it's simpler. I have both a NY sales tax merchant account and a
Canadian GST account. The GST is much easier to deal with.

What's your experience with VAT?

So, you're a reseller, and you would find it simpler to pay the tax you're not
subject to and then get it rebated?

You're not explaining your business situation as to why you have these
accounts.

So, you're a reseller, and you would find it simpler to pay the tax you're not
subject to and then get it rebated?

No, I'm saying that I DO find it simpler. I'm reporting actual
experience, as opposed to making stuff up.

You're not explaining your business situation as to why you have these
accounts.

Indeed. So?

R's,
John

John Levine wrote:

So, you're a reseller, and you would find it simpler to pay the tax
you're not subject to and then get it rebated?

No, I'm saying that I DO find it simpler. I'm reporting actual
experience, as opposed to making stuff up.

You're not explaining your business situation as to why you have these
accounts.

Indeed. So?

So you're not a merchant, and what you're babbling about is irrelevant
to anything Stephen said. Or you are a merchant, and you are being
deliberately evasive so no one can tell how your experience relates
to the real world of other merchants.

Otherwise, your followup has been a fine contribution to this thread.

On 23-Jan-12 13:01, Adam H. Kerman wrote:
John Levine wrote:

That's a load of crap. You want the merchant to handle monies that have
to be refunded, eventually, claiming it's simpler.

Yeah, it's simpler. I have both a NY sales tax merchant account and a
Canadian GST account. The GST is much easier to deal with.

What's your experience with VAT?

So, you're a reseller, and you would find it simpler to pay the tax you're
not subject to and then get it rebated?

You apparently don't understand how a VAT works. Here's how reselling
widgets works under the sales tax system, assuming a rate of 10%:

1. Get a sales tax license
2. Set up a commercial account with a wholesaler, providing your sales
tax license information so they don't charge you sales tax.
3. Buy a widget for $8.00, not including sales tax.
4. Price the widget at $9.09.
5. Sell the widget for $10.00, including sales tax of $0.91.
6. Send the government $0.91.
7. Keep your profit of $1.09.

Here's how it works under the VAT system, with a rate* of 9.1%:

1. Buy a widget for $8.80, including VAT of $0.80.
2. Price and sell the widget at $10.00, including VAT of $0.91.
3. Subtract VAT paid of $0.80 from VAT collected of $0.91.
4. Send the government $0.11.
5. Keep your profit of $1.09.

How do you think the former system is simpler? At worst, it has the
same complexity.

(* Due to the different ways of applying the rate, to get the same
yields calculate V=S/(1+S) or S=V/(1-V).)

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking

Stephen Sprunk wrote:
On 23-Jan-12 13:01, Adam H. Kerman wrote:
John Levine wrote:

That's a load of crap. You want the merchant to handle monies that have
to be refunded, eventually, claiming it's simpler.

Yeah, it's simpler. I have both a NY sales tax merchant account and a
Canadian GST account. The GST is much easier to deal with.

What's your experience with VAT?

So, you're a reseller, and you would find it simpler to pay the tax you're
not subject to and then get it rebated?

You apparently don't understand how a VAT works.

I understand just fine how VAT works. John Levine made an irrelevant
comment about VAT, which I ignored.

How do you think the former system is simpler?

I made no such comment. Why not address your question in followup to
John Levine's article?

All I said was that I disagreed with YOUR suggestion that the merchant
collect sales tax from everyone, including transactions in which the
law would not impose a sales tax.

On 23-Jan-12 12:34, Adam H. Kerman wrote:
Stephen Sprunk wrote:
On 23-Jan-12 11:26, Neil Williams wrote:
On Jan 23, 6:00 pm, "Paul Rigg" wrote:
Different sales tax rates apply to different goods in my state.

Not a reason not to include them in the price. My point was that if
customer X enters the shop, then customer Y enters the shop, and both
buy the same thing, both would be charged the same for it?

Not in the US, unfortunately. There are various buyers that do not have
to pay sales taxes, either at all or for certain uses. So, even
customers who buy the same things in the same place may not pay the same
tax.

That really doesn't affect a lot of buyers:

In my state, units of government and schools (not non-school educational
organizations) and churches and charities are exempt from sales and
use taxes.

.... which means every merchant must be capable of handling tax-exempt
sales in case such a buyer shows up. It also encourages posting pretax
prices rather than post-tax prices.

It's not an exemption as there's no VAT in the United States, but sometimes
goods for resale are purchased at retail stores and not from wholesalers
or distributors or from the manufacturer. The reseller does not pay sales
tax to the retail store as it's not a retail transaction.

And that's just plain broken.

First of all, this distinction between "retailers" and "wholesalers" is
merely an artifact of our stupid sales tax system. The VAT system,
where all sales are taxed and there is a credit for tax already paid
when a product is resald, is much simpler because all sales would work
the same way. Anyone could then buy from any merchant, and discounts
would be based on volume rather than tax status.

It would also eliminate an entire class of tax fraud.

The more logical solution would be for everyone to pay the tax and for
exempt buyers to get a credit/refund. That would also seem to be less
susceptible to fraud while greatly simplifying things for merchants.

That's a load of crap. You want the merchant to handle monies that have
to be refunded, eventually, claiming it's simpler.

Yes, it's simpler for the merchant. They calculate a fixed percentage
of their total revenue and forward it to the tax collector. That's it.

I was a cashier as a kid. We had electronic cash registers many years
ago. With the push of a button, there was a way to ring up a non-tax sale.
The cash register would report aggragate non-tax sales, which would be
entered into the books. No, not collecting the un-owed tax didn't impose
an additional burden because there's already bookkeeping associated with
inventory and sales and tax collection.

It meant their accountants had to track whether each sale was taxed or
not, which is obviously more work than _not_ doing so.

The buyer or reseller would then have to save his receipts; that's a
burden.

They have to save their receipts anyways for income tax purposes, so
there is no _new_ burden.

He'd have to file a form with the state for rebate; that's a burden.

True, but they likely have to file many forms with the state anyway, so
it doesn't seem like a significant one.

The state would have to process forms from a great many non-taxpayers who
aren't currently filing forms. That's a burden.

Doesn't your state require them to file forms today to get the
documentation proving they _don't_ need to pay taxes today? Or are
merchants supposed to magically know who does and doesn't need to pay?
What is the fraud rate of such a system?

So, this is really switching from filing/processing one form to
filing/processing a different form with exactly the same information
except the addition of the amount to be refunded and an account to
deposit it in.

The state would have to issue the rebates. That's a burden.

An insignificant one; it's just a direct deposit into the account listed
on the form, and states already do millions of those per month.

In the meantime, the non-taxpayer is without money he never owed to
the state in the first place. That's a huge burden, especially if you're
talking about a cash-poor charity.

Yes, the reduction in liquidity is a problem. However, the problem is
mainly the transition rather than the steady state.

You don't know what you're talking about.

You're making mountains out of molehills.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking