Are Lawmakers Paying Their “Use Tax” on Campaign Purchases: Marketplace Fairness Act

I found an Interesting article on allegations of “use tax” evasion.  This person’s case (mentioned below) was dismissed BUT I wonder how many state and federal campaign purchases (Senators, Congressman, and Presidential hopefuls, etc…) actually tracked the “use tax” owed on campaign purchases.  Items brought across state lines, items transported in-between different taxing jurisdictions (taxed low then brought into and “used” in high tax areas where the difference must be reported) within each state.  Also, when they are on the campaign trail and visit one of the states that have no sales taxes.  Are they declaring the “use tax”  when they leave the state with the items and use them elsewhere?  How much money could the states get in back taxes owed by auditing this type of “use tax” evasion scheme?”  We know how much money is spent on campaigns…it might exceed $24 billion….in “use tax” owed (joke – sarcasm…or maybe not).  Since “use tax” collection is such an “important issue” I think this area needs to be looked at too.  Maybe MORE legislation called the “Campaign Fairness Act” needs to be implemented.

Here is a brief synopsis on an article I read.

Gary English wrote, “One should know there is no defense for ignorance of the law, especially those that write the laws, our esteemed Legislature. So I presented the courts with a similar paper trail that demonstrates that our legislators make purchases outside the taxing authorities as documented on their campaign expense reports. Conspicuously absent from these reports were payments remitted to Revenue Department for the “use tax.”

“In 2010, Gov. Ed Rendell conducted a tax amnesty program. Not one legislator stepped up and paid the “use tax” on his campaign purchases. Now in 2012, Corbett and the Department of Revenue are requiring citizens to declare their tax liabilities on the PA-40 income tax form. Since the court has chosen to ignore this issue, and our legislators take an oath to uphold the Constitution, we must conclude the “use tax” is unconstitutional by their actions of nonpayment.”  To read the full article click here http://www.ldnews.com/ci_19917677

Taxes, and Zip Codes … what a PAIN!!!

“Zip Codes are, nor  NEVER have been,  designed to define  tax districts.”

So I get my property tax notice on my car today.  How nice that they include in that tax bill where your money goes for the amount charged.  A nice set of bar graphs that show that schools get this amount, the fire dept. get that amount, the library and local higher education college want their share of the tax pie, and a $15.00 local road maintenance fee.

I live a couple miles from the neighboring county line, and my zip code is for that neighboring county.  My mail is serviced by that neighboring county.  I am the last house on the postal route.  Works for me, as all I want is my mail delivered correctly, and USPS provides stellar service.

So I look at my bill, and they want to charge me for zip code 293xx schools (the neighboring county) rather than zip code 296xx (the county I live in) schools, and there is a 11% difference in the amount charged!  So I call Dingbat City {my pet name when calling clueless local govt. first person contacts}  And what they told me was shocking.

Sir, you were charged the other County school tax because we think your local schools (or polling places) are located in the other county (293xx zip), not ours (296xx zip). We have no kids, but I do know where local schools are, and the information the clerk stated was incorrect.  Local Elementary (also my polling place) and High School are more than 3 miles closer than the neighboring county.

I told my wife this and she called up neighbors and compared notes.  They were charged correct tax.  It seems our neighbors were charged correct tax while we were a victim of a mistake.  A call back to ‘Dingbat City’, now armed with facts, spurred an investigation, and they found we were correct after all.  We got a revised property tax bill, correctly written, and were told a refund check for past transgressions would be issued as well.

Bottom line folks, zip codes are, nor never have been, designed to define tax districts.  Lawmakers cross zip code boundaries thinking you live where you don’t.  In our boundary location, we have found similar situations with the 911 system (they think we live in a nearby city, not the county), as well as smartphone apps that ‘think’ we live HERE, but
not THERE!

Should I sue a merchant that charges me 2% more than where I actually live (State base rate)?  And how should an auditor from SC DOR handle that?  Yes, MFA exempts software errors, but that would leave those that pay more in Sales Tax when they shouldn’t, in a do-nut hole.

Keith Yockey
KEY Products LLC
www.thedumbdog.com

Quotes by Steve Womack: Sales and Use Tax: Marketplace Fairness Act

Steve Womack Regarding Sales and Use Tax

STEVE WOMACK has been the U.S. Congressman for Arkansas’s 3rd congressional district since 2011.  He assumed office on January 2, 2011.  Prior to his election to Congress, Womack was Mayor of Rogers, Arkansas since 1999. At some point he also worked as a financial consultant for Merrill Lynch. (Source Wikipedia)

David Welch wrote an article that appeared at Bloomberg.com.  WOMACK told him that the online tax bill took shape after a conversation with top Walmart executives in January of 2011. WOMACK had asked Walmart what issues were important to them. Walmart told WOMACK that they wanted him to seal up the loophole that allows online retailers to sell goods without a sales tax.

On July 24, 2012, Arkansas News reported that WOMACK said he rarely makes online purchases but confesses that before coming to Congress he wasn’t very vigilant about paying the sales and use tax.  “I hadn’t always done that,” he said. 

  • Note:  He was the Mayor of Rogers, Arkansas for 12 years and had worked as a financial consultant. Only after he assumed federal office and met with Walmart executives (all during January 2011) he found it necessary to be vigilant on paying his “use tax.”

On June 28, 2013, Womack’s official U.S. Congressional website shows, “Today, in the state of Arkansas, if you buy something online and the retailer does not collect the sales tax, current state law requires you to pay that tax to the state yourself. That’s the law! That’s confusing and burdensome, and let’s be honest, even though not doing so is tax evasion, very few people are going to save up receipts all year to send in their unpaid sales tax.” – ” I’m a proud conservative and have always stood for lower taxes and limited government. But in my book, protecting special-interest loopholes and encouraging tax evasion isn’t conservative; it’s foolish.

  • Note: Prior to coming to Congress WOMACK said he did not pay his “use tax.”  After he gets into Congress and meets with Walmart executives he says, “encouraging tax evasion isn’t conservative; it’s foolish.”

On September 18, 2013, Womack’s official U.S. Congressional website shows ,”For over twenty years, this tax loophole has forced more and more of the small businesses that line our Main Streets to shut their doors.”

  • Note: WOMACK was the mayor of Rogers, Arkansas since 1999.   He said that before coming to Congress he wasn’t very vigilant about paying the sales and use tax.  “I hadn’t always done that,” he said.  (Arkansas News).

According to opensecrets.orgWalmart was a major lobbying force behind the Marketplace Fairness Act (MFA).  This is legislation that WOMACK is the lead sponsor for in the House of Representatives that will purportedly close the “loophole” if it becomes law.  In 2012 Walmart spent millions of dollars lobbying our lawmakers for change in the retail industry.  WOMACKS’ campaign and many other lawmakers received huge campaign contributions from Walmart, other big box stores, and other related sources for the 2011-2012 election cycle.

Here are a few tweets worth reading:

 

My Opinion

It wasn’t until Walmart executives told WOMACK to close the so called “loophole” that he found it necessary to be vigilant on paying his use tax obligations.  The “loophole” he refers to is the U.S. Constitution Commerce and Due Process clauses.  Prior, he was the mayor of an Arkansas city and apparently had merchants on his own main street that were purportedly closing down due to the lack of people paying their “use tax.”  I think WOMACK’s new tone on paying “use taxes” is merely political posturing after big money met with him and asked for his help to stifle the competition.  The “use tax” issue was not “really” impacting main street as he alleges, it was impacting Walmart.

It sounds to me that “use tax” is a new tax for WOMACK starting in 2011.  He apparently never paid them before 2011 based on the articles I have read.

As the mayor, if it was really impacting “main street” one would assume that WOMACK would have paid his “use tax” to help his local businesses out.  The MFA is NOT about “main street.”  It is a payment owed to Walmart for funding WOMACK’s election through campaign contributions.

YOU MUST READ THIS ARTICLE NEXT - This will show you how big business is using small businesses as pawns to get the MFA passed.  

Click Here to Read Main Street Helps Promote Walmart’s Tax Agenda to Crush Small Business 

Please note anything I write about is my expressed opinion based on what I have been reading in articles or based on my own experiences. I might be wrong. If you think I am wrong about something feel free to post a response. I will allow arguments on both sides of any article.

Scott Rigell It IS a Tax Increase in Minnesota and Missouri: Marketplace Fairness Act

I copied this statement from U.S. Congressman Scott Rigell’s Facebook Page:

“We appreciate the calls and comments our office has received with concern for Rep. Rigell’s support of the Marketplace Fairness Act. Though it’s been inferred, this bill does not create a new tax on hardworking Americans; it simply enforces… the existing sales tax laws. Currently, states are not allowed to collect online sales tax from retailers at the point of sale. Instead, some states – like Virginia – require residents to file Form CU-7 along with their income taxes so that the state can collect sales tax on internet or catalog purchases. The Marketplace Fairness Act removes this unnecessary tax provision and levels the playing field for small businesses by ensuring that their online competitors are facing the same tax requirements as they do.Rep. Rigell supports the basic principles established by the House Judiciary Committee that stress tax relief, simplicity, states’ rights and privacy rights.” 

Scott Rigell, please explain how the information I provided below “does NOT create a new tax on hardworking Americans” in Minnesota and Missouri?

Did you know that Missouri allows you to purchase up to $2,000 a year in out of state online and catalog orders and NOT pay “use tax” on the purchases. Here is a link to Missouri’s Business Portal.  Missouri rules specifically shows:

  • “If you have made cumulative taxable purchases of less than $2,000 this calendar year, check the box which states: “I do not have cumulative taxable purchases totaling more than $2,000 this calendar year” and file the return.  You would not owe consumer’s use tax at this time.  Consumer’s use tax is only due on the total purchases once you have exceeded $2,000 in a calendar year.”

Minnesota also allows a person to exempt up to $770 a year in non taxed out of state purchases made online from paying “use tax.”  Source State of Minnesota.

Conclusion

Therefore, Minnesota ($770) and Missouri ($2,000) both have thresholds where no “use tax” is owed on non-taxed purchases. If MFA becomes law all of the non-taxed online purchases made today will have a NEW tax tomorrow. There will be no-way to determine if a purchaser has exceeded their threshold they are allowed under their State laws. IT is a tax increase in some states.

I sell online and have customers that buy from us each month from Missouri. If the MFA becomes law I will have to start charging them a tax on something they NEVER had to pay a tax on before. Sounds like a tax increase to me.

Also your Facebook Page shows, “and levels the playing field for small businesses by ensuring that their online competitors are facing the same tax requirements as they do.”  I think you do not really understand who is behind it his legislation or choose not to really acknowledge it due to political backlash  On April 10, 2011, Al Norman wrote an article (read the article) that appeared on Huffingtonpost.com. He points out that the entire issue of internet sales taxes is a battle between Walmart and Amazon.com.  Big box stores did not think it was fair that Amazon had an advantage over them in retail sales.  It has nothing to do with helping “mom & pop” businesses.

 

The Marketplace Fairness Act: Welcome to this great VIRTUAL nation.

Originally posted on Marketplace Fairness Act:

Welcome to the United States.  On behalf of the President of the United States and the American People, we welcome you to this great VIRTUAL nation.  Your VIRTUAL presence is welcome here.  You no longer have to come and have “physical presence” here to share in the American dream. A portion of this language comes from WelcometoUSA.gov.

If the Marketplace Fairness Act becomes law sales taxes will have to be collected by merchants that have a physical presence in the United States of America that are engaged in “remote sales.”  An example would be a business with physical presence (a warehouse or store) in Minnesota that sells a product “remotely” to a person in New York.  The Minnesota business would be required to collect the sales tax from the person in New york, and then submit the sales tax to the State of New York.

This made me think about how this will impact income…

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Marketplace Fairness Act: Where are the Mom & Pop Stores?

Originally posted on Marketplace Fairness Act:

Where is the mom & pop retail store?   It is kind of like saying, “Where is Waldo?”  The Waldo books depict many people doing a variety of amusing things at a given location. Readers are then challenged to find a character named Waldo hidden in the group ( Wikipedia ).  I looked around my city and tried to find mom & pop.  They are even harder to find than Waldo.

The general store is the mythical place that once existed on Little House on the Prairie. Harriet & Nells Oleson owned and operated Oleson’s Mercantile which was the only retail store in Walnut Grove, Minnesota. They are the type of business that people envision when they think of the mom & pop store. On a rare occasion in a small town in America you might still find one of these “real” mom & pop stores in existence.

The Marketplace Fairness Act (MFA) is being advertised by big business as the…

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Wal-Mart Jilts the Consumer & Taxpayer: The Deception Behind the Internet Sales Tax

Thomas Carlson:

Old news is still relevant. This is why the Marketplace Fairness Act is currently being debated by our law makers. Thanks Walmart.

Originally posted on Marketplace Fairness Act:

To the Consumer and Tax Payer.  You are being LIED to.  You need to STAND UP & BE HEARD now!  Please note this is my expressed opinion based on what I have been reading in articles.

Marketplace Fairness Act Internet Sales Tax

The CONSUMER (you) have been DUPED into believing that the Marketplace Fairness Act (MFA), AKA Internet Sales Tax legislation is for the benefit of the small “Mom & Pop” retail stores on main street. The MFA is legislation that was bought and paid for by Wal-Mart (Walmart) and other big box campaign donations and lobbying efforts.  According to sopatrack.com (since this article was published the sopatack website has been down.  Here is a link to the cached version) the U.S. Senators received $52,872,918 in money supporting this legislation and $3,028,786 in money opposing it.

On April 10, 2011, Al Norman wrote an article (read the article) that appeared on Huffingtonpost.com. He points out that the entire issue of internet sales taxes is a…

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Best Buy: Internet Sales Tax Will Just Inflict MORE Pain

I responded to an email from Best Buy today. They asked me to post an email response to my blog post titled, “Best Buy’s Joly Actually Tells Congress Why NOT to Pass the Marketplace Fairness Act.”  I attached their email to the article.  Click here to read the article and response.  After I posted their response I had one follow-up thought and emailed them this information:

Kim Unloading a 20' Cointainer All-By-Herself. It  took her about 6 hours.

Kim Unloading a 20′ Container All-By-Herself.  It took her about 6 hours.

“Attached is a photo of my wife unloading a 20′ container of product all by herself.  I could not help and the kids were in school.  In August I was hospitalized after I fell and completely tore my left quad tendon off.  I was on the road to recovery and slipped on December 9th and tore my quad tendon off again and broke my knee cap.  On December 30, 2013, I was hospitalized again for a third surgery after I got staph infection.

My wife basically ran the entire business from December to the end of January.  It included unloading a 20′ container, packing orders and taking phone calls.  This legislation is not what it appears to be.  It punishes small businesses like mine that wants to stay small.  We grew out of our basement.  We have no interest in hiring anyone and that is what this legislation will force us to do.  It might also make us downsize to stay below the million mark.
  • I urge Best Buy to support the legislation ONLY if it is simplified.  It is not simplified in its current form.  I have no problems collecting taxes but it truly has to be streamlined.  It is set-up now to crush many small businesses.”
Additional Information:
Here is what my knee looked like when the infection set-in:
Tom Carlson Infected Knee
TODAY I have recovered enough to pull my weight and work as a team-member with my wife.  I wear a leg brace for the next 2 months.  Hopefully I will have it off by June 2014.  Kim is an incredible woman and she has kept our business afloat during a real hard time.  Please do not Inflict my small businesses with more pain through paperwork and expenses.

Welcome To Delaware Sign: Home of Tax – Free Shopping

I thought this was interesting. When you enter Delaware they invite you in for Tax Free Shopping.  I wonder how the border states deal with the “use tax” evasion when people from their states run across the border to shop?  Maybe the Marketplace Fairness Act should require all brick & mortar stores to ask for ID’s to send the taxes back to each state where their customer is from.  This would help “level the playing field.” The government would not be “picking the winners and losers.”  It only fair, right?