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A better understanding of the mechanism by which businesses are going to have the FairTax excluded on their business purchases-- how intrusive vs. how easy to cheat?

In reponse to this once before, I posted for you a section of the actual bill, H.R. 25. Did you not read it? Have you forgotten what you read? Did you not believe it?

As I recall, it said that those selling business to businees, that was the situation you asked about I think, that the sales tax would be charged on all purchases and credited against any taxes you collected as an NRST. If as a business to business seller you collected no NRST, then you would submit the amount to the government and be refunded that amount.

How do you prevent cheating? Ask your wife. Ask your best friend. Ask your preacher. Then share the secret with the rest of us. No tax can prevent a sly and determined cheat but with the NRST there are fewer people to chase down and a clearer trail to what they are doing.

If it is as you say, then compliance costs will still be high under the FairTax. After I do my expense reports for the month, someone will need to provide the paperwork on every transaction (including whatever documentation they are going to require to substantiate the purchase) in a massive database and send that off to the government to get the refund. So, it will cost more.

SInce you are prepaying the FairTax, in effect they are "withholding" the tax and yu apply for a refund.

It will be intrusive because these beauracrats will have every single transaction for every single business in America to examine and potentially analyze/audit. Much more intrusive than the present system.

For Joe Sixpack all of this is no big deal. For a business, where you are expecting them to save money in compliance costs, I don't see the savings or the additional freedom.