It turns out that the vast majority of Americans are completely unaware of those rules, so the forms don’t get filed and the taxes don’t get paid -- to the tune of an estimated $23.2 billion in 2012, according to the National Conference of State Legislatures.
SALES TAXES WITH A FUTURE. Despite more than 9,600 taxing jurisdictions in the U.S., an online sales tax would reportedly raise only a tiny percentage of most states' budgets, and would be complicated and expensive for businesses. According to many experts, small retailers pushing a sales tax as an issue of fairness may have their sights on the wrong opponent. Small-town retailers are getting clobbered far more by Wal-Mart and Target than by the Internet. In fact, many Main Street stores, including many powersports businesses, are turning to the Internet to reach customers that would not come to their store.
Different taxing jurisdictions tax different products, goods and services at various rates. In one state, for example, orange juice is defined as a “fruit” and subject to sales tax. Labeled a “beverage” in a neighboring state, that same orange juice is not taxed.
All too often, the only thing many of those taxing jurisdictions have in common is the pressure from their taxing authorities to generate badly needed revenues for the governments that levy them.
Those sales taxes collected by many dealers and paid by even more are increasing in both amount and complexity. Cash-strapped state and local governments are raising sales tax rates and stepping up enforcement of their collection rules. This, of course, increases the burden on businesses, whether required to collect those sales taxes or required to pay sales and use taxes.
Obviously, whether collecting those sales taxes or required to pay sales and use taxes, every powersports business owner and manager should be familiar with the sales tax regulations in their area. Any dealer caught not collecting sales taxes must pay those amounts from its pockets.
ABOUT THE AUTHOR: Mark E. Battersby has been a freelance business writer for over 25 years. He regularly reports on news and developments within the tax and financial arenas, including impact of new tax laws, court decisions and IRS rulings. Battersby is based in Pennsylvania. Send questions and comments about the above article to editors@dealernews.com
