Posted on 02/13/2005 10:41:05 AM PST by nsmart
The FairTax is the non-partisan national sales tax proposal that would replace all federal income taxes. These include personal, estate, gift, self-employment, alternative minimum, capital gains, FICA, and corporate and death taxes.
(Excerpt) Read more at WWW.FAIRTAX.ORG ...
A temporary blip. I'll agree that transition could get messy. On the other hand, people will have more cash in their pockets (no income or payroll taxes taken out, plus they are receiving the FCA "rebate"). Plus, American exports will be thriving due to removal of income and payroll tax costs in their production prices. So, while things could get a bit ugly during the transition, I don't think we'll have a depression of any sorts.
Under Section 2(a) 16, "used property" is property on which (A) tax has been paid or (B) held for other than for a business purpose on 12/31/06. I quite agree that there is no such thing as "new land" (other than volcanic lava), but that doesn't seem to be the definition. If land is held for other than business purposes on 12/31/06, then it would be exempt under subsection (B). But if land was held for a business purpose, then it would seem to be taxed the next time that it is sold.
The new version of the bill specifically says "or," not "and." This is the only difference in this version of the bill.
Good of you to notice that, That change to the language, by the way, came out of discussion on FR back around last April 24th, as to the ambiguous interpretations of that element of the bill.
I and I am sure others are assuring that AFT and Linder's office is being updated as to problematic language and issues with the Fair Tax Act as these FR debates continue.
Business to business transactions aren't taxed. Only when sold for retail consumption.
"The 30% tax of transactions for "new" or "untaxed" items (however that is defined). That's a tremendous incentive to try to structure transactions so that they seem to be outside the tax or to just flat out buy and sell on the black market without any regard to the tax. Those who try to play by the rules are at a serious disadvantage when the rules make no since, such as when you have made a used item more valuable than a new one."
But if land was held for a business purpose, then it would seem to be taxed the next time that it is sold.
Where it is held in business for sale it qualifies for a transitional inventory credit to assure prior federal income and payroll taxes are not passed on to the customer in price.
H.R.25Fair Tax Act of 2005 (Introduced in House)
`SEC. 902. TRANSITION MATTERS.`(a) Inventory-
`(b) WORK-IN-PROCESS- For purposes of this section, inventory shall include work-in-process. `(c) Qualified Inventory Held by Businesses Not Selling Said Qualified Inventory at Retail-
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Other Credits available for non business assets converted to business use etc. also are provided in `CHAPTER 2--CREDITS; REFUNDS, & CHAPTER 7 -- SEC. 705. MIXED USE PROPERTY.
Since I have a limited amount of time to spend posting to these threads, I took the time to read the posts following yours and can add nothing to what has already been posted by others.
O.K., so land held for business purpose (say, for residentital real estate developmont) prior to 12/31/06 and then sold to a homeowner for his residence would be subject to the NRST. And that would be true whether or not the deveoloper or the buyer is the one to build the home.
Correct?
With the developer holding that inventory receives a credit against remittng the NRST for the 23% of its input costs in building it. Thus the market is rebated for prior income/payroll taxes paid in building that home allowing after-NRST pricing to equalize with new homes built after the the implementation date.
See #426 above.
I give up. I guess the answer is "it depends."
Yes there would be an NRST on new build homes held in inventory by developers across the implementation date. The developer selling the home in that case receives a credit against NRST received from the purchaser allowing maket adjustment of pricing to equalize with homes built after the implementation that have no payroll income taxes associated in their construction.
The the total cost(including NRST) to the buyer will be the same for both situations.
Principled: "No - consumers are liable for the tax. Those who collect tax are the ones who remit to the state."
OK, here is the definitive answer. Lets look through the entire bill to understand:
Point #1. First the Fair Tax Act of 2005 Bill Clearly says the PURCHASER is LIABLE for the tax unless he has a Receipt, let's read:
`SEC. 101. IMPOSITION OF SALES TAX .
(d) Liability for Tax -
Do you disagree???? I should hope not.
Point #2. Then we have Section 103 which relates only to Retailers.
`SEC. 103. RULES RELATING TO COLLECTION AND REMITTANCE OF TAX .
`(a) Liability for Collection and Remittance of the Tax - Except as provided otherwise by this section, any tax imposed by this subtitle shall be collected and remitted by the seller of taxable property or services (including financial intermediation services).
Section 103 is clearly talking about taxes where a receipt was given by a Retailer. In this case, the Retailer is solely liable for the tax consistent with what Section 101 says.
Point #3. Next we have Section 501 which covers BOTH cases, section 103 Purchases and Purchases where the Purchaser is liable and BOTH are required to REMIT the tax!
`(a) Tax Reports and Filing Dates-
`(1) IN GENERAL- On or before the 15th day of each month, each person who is--
`(A) liable to collect and remit the tax imposed by this subtitle by reason of section 103(a), or
`(B) liable to pay tax imposed by this subtitle which is not collected pursuant to section 103(a),
shall submit to the appropriate sales tax administering authority (in a form prescribed by the Secretary) a report relating to the previous calendar month.
Paragrah A covers Section 103 taxes with a Purchaser Receipt. Paragraph B cover other Purchases where there is no receipt. This is where it makes the INDIVIDUAL PURCHASER, not the RETAILER, liable to pay and SUBMIT the sales tax. Now are you going to agree with me that your bill clearly makes the Purchaser liable to remit the tax? Now that we have established the FACT the a Purchaser is LIABLE unless he has a receipt and must REMIT the tax to the state, that means INDIVIDUALS are subject to all the same audits, requirements to produce records, liens, and penalities. This is no different then the current IRS. So, KEEP your personal reciepts, you may need them! In the context of the ENTIRE bill, my understanding is correct.
`SEC. 101. IMPOSITION OF SALES TAX .(d) Liability for Tax -
* `(1) IN GENERAL- The person using or consuming taxable property or services in the United States is liable for the tax imposed by this section, except as provided in paragraph (2) of this subsection.
* `(2) EXCEPTION WHERE TAX PAID TO SELLER- A person using or consuming a taxable property or service in the United States is not liable for the tax imposed by this section if the person pays the tax to a person selling the taxable property or service and receives from such person a purchaser's receipt within the meaning of section 510.
Do you disagree???? I should hope not.
Actually, your interpretation is severly flawed. You selectively highlight certain text, but completely gloss over the fact that the two are not related. Clause 2 specifically says the consumer is no longer liable for the tax once it is paid to the seller. This makes the rest of your screed pointless.
LOL. You are making no sense. I highlighted and explained every relevant point in percise detail. Individuals can be audited because they are liable and required to remit the tax. In order to show you are not liable for a tax you must produce a receipt if asked. Once you produce the receipt then you are no longer liable. But the NRST is not tax freedom for individuals. It is just as intrusive and vile as the current system.
I think you left out the part and "receives from such person a purchaser's receipt within the meaning of section 510." Who is the one selectively reading.....
Keep your fanatsies. I read through your entire post, and it got less compelling as an argument the longer it went on. You are trying to cherry-pick lnaguage from different parts of the bill, while ignoring other relevant information, to create something that isn't there, just for the sake of decrying it.
You still haven't even come close to showing that the bill requires consumers to keep receipts or that they are subject to audit.
I felt no need to re-iterate what you had already highlighted. Your assumptions about me are as flawed as your strawman NRST arguments.
You are just plain ignorant. Really ignorant. You guys make so many lies and then when the lies are exposed you stick your head in the sand and act ignorant. It is pitiful to watch.
So, KEEP your personal reciepts, you may need them! In the context of the ENTIRE bill, my understanding is correct.
For large ticket items your absolutely right, it certainly behooves one to keep their receipts to protect their purchases from numerous possible problems, not to mention warranty as well as tax considerations if you wish to sell them, don't you already?
However, as far as sales tax collection is concerned there must be a probable cause for the state tax authorities to even get to the point of inquiring about prior payment of tax under the provisions of presumption of innocence and lawful behaviour in the Principles of Interpretation as pointed out in #416.
Just as today state sales tax agencies are not running around rifling peoples pockets and shoeboxes for receipts even for that car you bought or sold last year, you won't find them doing so under the NRST. That is unless you start acting like alot like a business, then probable cause crops up and yep you better be able to account for those items that aren't obviously out of someone's garage sale, or last years dinged up widgets in the flea market.
Engage in retail sales, expect to be open for questions as to sales license or proof you already paid tax on it, thats the way it is in my state anyway.
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