What you are saying to me is that, even though my freelance work was a legitimate business and not a "hobby", under the FairTax I would have had to show a profit for 2 out of 3 years before I would qualify for the "business use" tax exemption -
No, what the statute states, that if your exemption is ever challenged, the 701 provision is the affirmative criteria you can use to show you are not a hobby.
Getting certification in the first place requires little more than being able to demonstrate you do have a business.
and then only if I use the item I bought almost exclusively for business.
I would say that 95% business use is a pretty strong case of exclusive use for business. Yes.
The reason the FairTax would have to be so Draconian toward small business is that a NRST is inherently easy to evade.
An inherent flaw in past state implementations of retail sales taxes and indeed the income tax the FairTax system replaces.
So the FairTax screws honest people trying to avoid being ripped off by the dishonest ones.
Hmm, more like encourages honest people to stay honest. I've listened to more than one sales pitch for entering small business schemes involving the advantages that tax exemption of mixed use assets allows in minimizing personal income taxes. Whole marketing schemes are based on that one.
If a strong majority of people were actually honest in tax exempt purchasing no such provisions would even be necessary, the only ripoff has been the lax enforcement of business use rules to begin with enabling and in many ways encouraging such activity undermining tax compliance among small businesses as a whole.
Keeping one's business clearly separated from one's personal finances is a significant plus in my view and experience.
The FairTax would be the end of the (legitimate) home business.
More like it would be the end of fraudulent use of a marginal business to evade taxes, as is done under the current tax systems.
Huh? That doesn't make sense. I get the exemption whether or not I've made a profit in 2 of the last 3 years, but if I'm challenged on my exemptions I must have made a profit in 2 of the last 3 years to qualify for the exemptions.What you are saying to me is that, even though my freelance work was a legitimate business and not a "hobby", under the FairTax I would have had to show a profit for 2 out of 3 years before I would qualify for the "business use" tax exemption -No, what the statute states, that if your exemption is ever challenged, the 701 provision is the affirmative criteria you can use to show you are not a hobby.
Getting certification in the first place requires little more than being able to demonstrate you do have a business.
I would say that 95% business use is a pretty strong case of exclusive use for business. Yes.Like I said, the FairTax would be the death of the legitimate home business. Looks like they won't be lowering their prices after all...
Keeping one's business clearly separated from one's personal finances is a significant plus in my view and experience.Well, golly. If AG has that view based on his experience, let's just pull the plug on all home businesses.