Come tax day this April, you will be paying a new USE TAX whether you owe it or not. It’s factored in how much you owe the state in new taxes based upon “perceived” consumer purchases. If you purchased nothing, you still owe; if you spend more the state guesses what they think you owe.
Specifically, this will impede improvements in the economy, undermine confidence in the economy and, sadly, rub salt in the face of lower income families and stick it to seniors.
You know, it’s no longer the people’s government — we are mere subjects.
Our own Bill Ford of Joshua Tree is challenging the propriety of this preposterous new tax scheme, and Bill has done an outstanding job of explaining it on his local website. Read the story and see just how we all are treated like peasants of the state. Here is Bill’s story:
Oct 2011: Gov Brown signed into law a scheme to collect $mega-millions from California residents to offset the $multi-billion debt.
What is USE TAX? A short answer: ‘SALES TAX’ is a tax the state charges retailers (sellers) for the privilege of “selling” something within the state of California. ‘USE TAX’ is a tax the state charges BUYERS for the privilege of “using” what ever they purchased. The “tax rate” is exactly the same amount of dollars and cents.
The BUYER is typically EXEMPT from paying ‘use tax’ provided the buyer “reimbursed the seller for the amount the seller has to pay as a ‘sales tax’. If however, you purchased a taxable item, and did ‘not’ pay the sales tax to the seller, you are obligated to report the purchase to the state and pay the state the same amount in the form of a USE TAX.
I hope that clears up Sales vs Use taxes. For “this” article, let’s not talk about goods purchased from “out-of-state”, wholesale, distributor, or similar exempt purchases.
Here’s what the state of California has contrived: You WILL pay the state an amount of money for the “USE TAX” the state guesses you “might owe”, whether or not you actually “owe it”. How?
Simple, when you file your federal and state income tax return, the state imposes the amount of USE TAX they guess you might possibly owe. How the state calculates that amount is based solely on your “adjusted gross income” (AGI). The lower your AGI, the lower your USE TAX obligation.
Let’s say YOU are retired living off social security and for the more lucky, a retirement fund. You are still paying a mortgage on your home and have just enough to pay utilities, upkeep, insurance, property taxes but you have to really scrape the bottom of the barrel for food, health care and transportation. So, you don’t visit yard sales, swap meets to buy trinkets and you don’t purchase goods off the Internet and you throw the “junk mail-order catalogs” in the trash. Let’s just say, you have not purchased anything you had not already paid “sales tax” on. Remember, the seller “collects” the tax from you, the buyer.
The state doesn’t care… they will collect from you, money, for all the things you DID NOT BUY by snatching that money from you when you file your annual income tax return.
To read the letter Bill sent to the California Board of Equalization, click hereand scroll down.