South Carolina taxes the internet

[Thom Little]

Any South Carolina resident who buys something online is expected to pay a "use tax." But statistics show not too many people follow the law.

Of the nearly 1.3 million people who paid state income tax last year in South Carolina, 9,330 paid a use tax as well, according to Revenue Department data. An additional 381 people filed a separate use tax form.

The agency can bill people for not paying use tax. But there is no way of knowing how many South Carolinians should be paying.

The use tax could become more important to the state as lawmakers discuss lowering or eliminating property taxes. Most plans call for raising sales taxes to make up for the shortfall.


http://hosted.ap.org/dynamic/stories/S/SC_BRF_ONLINE_TAX_SCOL-?SITE=VARIT&SECTION=US&TEMPLATE=DEFAULT&CTIME=2005-12-26-00-06-43

[China_cat]

1. What is not stated and not understood by many

is that the 'use tax' is NOT just another way to try to collect state sales tax. Even if you pay sales tax on purchases, you are supposed to pay the 'use' tax...which is exactly the same as the sales tax. For me here in Charleston, if I purchase online and do everything exactly as I'm supposed to, an item costing $100 would generate a $13 (13% rate) tax as opposed to the $6.50 (6.5%) I would pay in a walk-in store.

SC also has this strange tax called the 'personal property' tax that you pay every year on vehicles, boats and mobile homes if you're an individual and on all fixtures and store equipment (desks, chairs, computers, light fixtures, security cameras, cash registers, adding machines, PENCILS, etc)if you happen to be a business. You are not allowed to depreciate out your 'personal property' if you're a business.

And they still want to raise the sales tax by 2%. WITHOUT getting rid of any of these others.

[papau]

2. you should get a credit for sales tax paid to other states against use

tax on the same item in your state.

The asset tax - personal property tax - is everywhere but only hitting the non-rich.

So it is on business assets of self employeed and on your car (called an excise tax) and on your personally owned boat.

[China_cat]

3. No, you get no credit. Use tax and sales tax are billed as

2 separate items even though they use the same tax rate, including any county 'local option' taxes if you buy within the state. If you're buying out of state you get no credit for paying the other state's sales tax AND you are still required to pay the 'use' tax which is exactly the same rate as this state's sales tax. No the 'personal property tax' is not an 'excise' tax on the vehicle (car, truck, boat, motor home, trailer, etc). You pay that when you buy. The personal property tax is charged and collected EVERY year. It declines with the depreciation of the vehicle but never to 0. No matter how long you own the thing, you will be charged tax on at least 10% of its original value every year you own it.

You can't renew your tags without the receipt showing that paid and proof of insurance.

[papau]

5. I had not heard of a state that would not allow offset - until now - I

suspect there is a commerce clause legal case waiting to happen. Or you need a new tax person helping you.

The personal property tax is everywhere and acts as you describe everywhere - always excluding the gold and what not of the rich, but chasing the cars and boats of the middle class. and computers and copiers of the unincorporated small businessman.

An asset tax (a personal and real property tax on everything) would hurt the rich - and help the middle and poor - so I doubt it will ever replace the income tax.

More likely is a national sales tax - indeed any tax designed to not upset the rich - as a full or partial replacement for the income tax.

The Class warfare pitch battles that started under Reagan is now all out war on the middle class and poor.

[rinsd]

4. Use tax also exists in CA (nt)