How in blazes does Schedule C of the South Carolina tax code apply to Joe Schmoe from Iowa buying a carton of SC cigarettes over the internet in New York state? The distributor needs the schedule C but Joe sure doesn’t.
Now when Joe gets taxed in Iowa for SC cigarettes, which he paid taxes on to the distributor, which he bought in New York, he is getting double taxed. Once with the SC tax and again with an Iowa tax.
Now double taxing is not illegal, at least for socialists - see dividend tax and death tax - and it’s up to congress to correct instances where double taxing is apparent. Or they can not correct it.
However, the burden falls on the state, as overseen by congress, to assure that its taxing schemes do not harm interstate commerce. It’s not up to Joe Schmoe to determine if he’s being fairly taxed - or double taxed - via interstate commerce rules.
The states must also be certain that its taxing schemes are not excessive.
So we get into another (stupid) “USSC test.”
The test assures that states take only their fair share of an interstate transaction. The idea comes from the prohibition of multiple taxation by states (double taxing) along the line of commerce. It prevents states from overreaching with various tax schemes.
The tax must also be both internally and externally consistent. So the tax of state A must be consistent with other states’ taxes and not hinder interstate commerce. If the tax is too high as measured by other states - not externally consistent - the courts, or congress, can shoot that state tax down.
With the current scheme of excessive taxation of tobacco, and double taxing, interstate commerce is definetly under harm. However, I’d say the chances of our gutless weinerdog socialist congress stepping in to correct this mess is about zero.
If the states get away with this, watch out for other excessive tax schemes, such as buying a vehicle in state A with a 3% tax and being forced to pay another 7% in your home state.
And the “no tax stamp” bogeyman came out of your closet, not mine.
I understand that taxes and forms seem very complex to some people so I've tried to go slow but apparently I haven't gone slow enough. You claim there is a double tax when Joe Shmoe purchases cigs from a an out-of-state vendor and his home state charges Joe a tax on the purchase. I expxlained that the vendor would not charge Joe a tax because Joe was taking delivery out of state and that sale would be exempt from tax and the vendor would not collect it. When the vendor in SC completes its report of sold cigs it would claim on Sch C the amount of cigs it sold to Joe Shmoe.
If the above is still above your head then I give up and just leave it at you are flat wrong when you say the tax is being paid twice.
Now when Joe gets taxed in Iowa for SC cigarettes, which he paid taxes on to the distributor, which he bought in New York, he is getting double taxed. Once with the SC tax and again with an Iowa tax.
This is the part you don't get. The distributor is not collecting a tax from Joe and NEITHER is the NY vendor. Both are selling out of state. I really don't know what else I can do to demonstrate that.. I have given you the law that shows the distributor isn't taxed by the state of SC. i have given you the tax forms that show the same thing. Either you willfully ignore the facts or are unable to grasp them. I am sorry but on this point I don't know what else to do to show you are wrong except what beyond the statute of SC or the tax forms of SC do you need as proof that the vendor selling cigarettes out of state is not being taxed? I personally don't know what else evidence you want because beyond the actual statute there isn't much else proof anyone reasonable would need. (You really shouldn't be doing your own taxes)
Now double taxing is not illegal, at least for socialists - see dividend tax and death tax - and it’s up to congress to correct instances where double taxing is apparent. Or they can not correct it.
Double taxes by states ends up being unconstitutional in most situations because of the commerce clause but not because the tax is levied twice. But because of the application of SC rulings that end up arriving at that point. That is basic interstate law. Again you really shouldn't be advising on taxes if you are not aware of basic principals.
However, the burden falls on the state, as overseen by congress, to assure that its taxing schemes do not harm interstate commerce. It’s not up to Joe Schmoe to determine if he’s being fairly taxed - or double taxed - via interstate commerce rules.
Joe is obligated to know the laws and pay his tax. The sales, use and excise taxes are placed on the final purchaser who if taxed twice would have to seek a remedy.
The states must also be certain that its taxing schemes are not excessive.
There is no law stopping them except the law of supply and demand. In that smokers have an inelastic demand (meaning they do not reduce consumption much when the price goes up) this natural law has little effect and makes the product easy to tax.
So we get into another (stupid) “USSC test.” The test assures that states take only their fair share of an interstate transaction. The idea comes from the prohibition of multiple taxation by states (double taxing) along the line of commerce. It prevents states from overreaching with various tax schemes.
The reason double taxing is unconstitutional has nothing to do with overreaching tax schemes. It has to do with treating nonresidents the same as residents and requiring the state to have some services to the taxpayer. But you are making my original argument, that there is no double tax on the sale of cigs on out of state sales. The seller shipping to a nonresident is exempt from the tax. I'm glad you at least recognize its unconstitutional, maybe we are making progress.
The tax must also be both internally and externally consistent. So the tax of state A must be consistent with other states’ taxes and not hinder interstate commerce. If the tax is too high as measured by other states - not externally consistent - the courts, or congress, can shoot that state tax down.,
I really don't know what you are getting at. The constitutional test in short hand is as follows: THE FOUR-PRONG TEST OF COMPLETE AUTO TRANSIT v BRADY (1977):
1. Does the activity taxed have a substantial nexus with the taxing state?
2. Is the tax fairly apportioned?
3. Does the tax discriminate against interstate commerce?
4. Is the tax fairly related to services the state provides the taxpayer?
In any case, you are making my argument. The sales to out of state residents are not taxed. This leaves the home state to tax its own residents who are not effected by interstate commerce clause.
With the current scheme of excessive taxation of tobacco, and double taxing, interstate commerce is definetly under harm. However, I’d say the chances of our gutless weinerdog socialist congress stepping in to correct this mess is about zero.
In the case we are discussing the interstate commerce clause is what stops the tax from being applied twice but has nothing to do with the home state taxing its resident.
If the states get away with this, watch out for other excessive tax schemes, such as buying a vehicle in state A with a 3% tax and being forced to pay another 7% in your home state.
Great extrapolation, however you have yet to make the original case on which you extrapolate.
And the “no tax stamp” bogeyman came out of your closet, not mine.
I used it as shorthand to explain that shipments out of state are not taxed by the state they are shipped from so that I could prove to you your error about double taxation. However at this point I see its impossible for you to follow the relevant law so I must simply give up on you.