Sales tax also cripples the used/resale/refurbish product, making it more locally efficient to buy new instead of used, pushing used goods into the waste stream.
How?
Sales tax creates more unnecessary pain than value added tax
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Re: Sales tax creates more unnecessary pain than value added tax
#32I'm going to take a wild guess and say the author isn't from the US. He includes sales tax on items purchased for resale.... which is an exception in every state that I know of. Even if you purchase an item at retail with sales tax, you can file to receive the money back from the state. Additionally sales tax has nothing to do with whether your supply chain is fully integrated, and hiring all of your suppliers as emp…
Where can you file for sales tax reimbursement? Essentially all online resale sites (eBay, Reverb, etc.) are charging sales tax on secondhand goods. So if I buy something, then sell it later, that first purchase should be considered a "resale" purchase, right?
Probably not unless you're filing sales tax returns regularly and the item was bought explicitly for resale. If you're not filing and selling regularly trying to buy something use it and then sell it to get a refund you're going to run into trouble with the state revenue services soon.
Re: Sales tax creates more unnecessary pain than value added tax
#33Sales tax also cripples the used/resale/refurbish product, making it more locally efficient to buy new instead of used, pushing used goods into the waste stream.
Why is this? Because people compare the used price to the pre-tax new price?
Re: Sales tax creates more unnecessary pain than value added tax
#34Earlier quoted context omitted.
Where can you file for sales tax reimbursement? Essentially all online resale sites (eBay, Reverb, etc.) are charging sales tax on secondhand goods. So if I buy something, then sell it later, that first purchase should be considered a "resale" purchase, right?
If you're a registered business with a tax ID number, you can deduct sales taxes paid on business inputs (supply) on your income taxes, whether personal or business.
Is that all states? That just sounds like VAT
Re: Sales tax creates more unnecessary pain than value added tax
#35I'm going to take a wild guess and say the author isn't from the US. He includes sales tax on items purchased for resale.... which is an exception in every state that I know of. Even if you purchase an item at retail with sales tax, you can file to receive the money back from the state. Additionally sales tax has nothing to do with whether your supply chain is fully integrated, and hiring all of your suppliers as emp…
Where can you file for sales tax reimbursement? Essentially all online resale sites (eBay, Reverb, etc.) are charging sales tax on secondhand goods. So if I buy something, then sell it later, that first purchase should be considered a "resale" purchase, right?
I believe there is a specific situation in that you must have purchased the goods intending resale (see the other reply explaining raw goods) of a further finished good. Buying something as a consumer, (not) using it then reselling it later is taxable.
Re: Sales tax creates more unnecessary pain than value added tax
#36Sales tax also cripples the used/resale/refurbish product, making it more locally efficient to buy new instead of used, pushing used goods into the waste stream.
How so?
1) second-hand goods purchased from a non-business are usually tax-free. With the exception of vehicles. You're asked to pay sales tax on these purchases when filing your income tax each year, but in practice, noone does this.
2) I buy used/refurbished tools and furniture pretty frequently. How exactly is the second-hand market being crippled here?
Re: Sales tax creates more unnecessary pain than value added tax
#37> Tax creates unnecessary pain There, fixed it for you.
What's the painless alternative?
Re: Sales tax creates more unnecessary pain than value added tax
#38What's to prevent implementing sales tax to have the same benefits as VAT? I don't see how we need to lose the transparency of sales taxes to get the benefits of selective VAT. For example, in many places in the US, food bought from groceries are not taxable.
Having a sales tax does not mean you can't be selective about it. This is the main thing that the author missed.
Re: Sales tax creates more unnecessary pain than value added tax
#39Author clearly doesn't understand how sales taxes work.
Sales tax is only charged on sales to the final customer. Resellers (aka, stores) are not charged sales tax. [EDIT: Note that a "reseller" is any individual or entity that has registered as a reseller with their state. This usually incurs an obligation to file a sales tax return at least annually.]
In contrast, VAT is levied on every participant in the chain of transactions. (Note that businesses can offset their VAT liability with the VAT they paid for services/goods received.)
Re: Sales tax creates more unnecessary pain than value added tax
#40Earlier quoted context omitted.
If you're a registered business with a tax ID number, you can deduct sales taxes paid on business inputs (supply) on your income taxes, whether personal or business.
Is that all states? That just sounds like VAT
It should apply in all states that HAVE a sales tax. Sales tax is only supposed to be applied to the end consumer sale. There are a lot of similarities between VAT and sales tax along with the differences.