[THEUPMAN]

The Joint Committee on Taxation estimated that it would take as much as a 57 percent (tax-exclusive) rate to be revenue-neutral.

this says a mouthful ...


but I have a question...
will there be a difference for "business" purchases or will every transaction be taxed?

the wholesale chain , you know?

How would that be handled? I'm really trying to get a little info here.
thanks

[kevkrom]

Only retail sales are taxed. Business-to-business sales or resale of previously taxed goods would not be taxed.

In general, tax everything, but only once.

[Principled]

Business to business purchases are not taxed... thereby eliminating the existing cascading of hidden taxes in prices.

Quick FAQ.

[Principled]

From the link I provided:

No tax on used goods. The amount you pay to fund the government is totally visible.
With the FairTax you are only taxed once on any good or service, the sales tax is charged just as state sales taxes are today. If you choose to buy used goods - used car, used home, used appliances - you do not pay the FairTax. If, as a business owner or farmer, you buy something for strictly business purposes (not for personal consumption), you pay no consumption tax. When you decide what to buy and how much to spend, you see exactly how much you are contributing to the government with each purchase.

[ancient_geezer]

but I have a question...
will there be a difference for "business" purchases or will every transaction be taxed?

the wholesale chain , you know?

Purchases by businesses for the conduct of their businesses are not taxed. Only the retail level of sales is subject to collection of the NRST.

It is a National Retail Sales Tax, not a tax on business purchases that would just get passed on buried in prices.

 

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:

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`SEC. 102. INTERMEDIATE AND EXPORT SALES.

`(a) In General- For purposes of this subtitle--

`(1) BUSINESS AND EXPORT PURPOSES- No tax shall be imposed under section 101 on any taxable property or service purchased for--

`(A) a business purpose in a trade or business, or

`(B) export from the United States for use or consumption outside the United States, if, the purchaser provided the seller with a registration certificate, and the seller was a wholesale seller.

`(2) INVESTMENT PURPOSE- No tax shall be imposed under section 101 on any taxable property or service purchased for an investment purpose and held exclusively for an investment purpose.

`(3) STATE GOVERNMENT FUNCTIONS- No tax shall be imposed under section 101 on State government functions that do not constitute the final consumption of property or services.

`(b) Business Purposes- For purposes of this section, the term `purchased for a business purpose in a trade or business' means purchased by a person engaged in a trade or business and used in that trade or business--

`(1) for resale,

`(2) to produce, provide, render, or sell taxable property or services, or

`(3) in furtherance of other bona fide business purposes.

`(c) Investment Purposes- For purposes of this section, the term `purchased for an investment purpose' means property purchased exclusively for purposes of appreciation or the production of income but not entailing more than minor personal efforts.

 

Tax once but only once is the bottom line rule for the FairTax NRST:

 

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:

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`SEC. 1. PRINCIPLES OF INTERPRETATION.

`(a) In General- Any court, the Secretary, and any sales tax administering authority shall consider the purposes of this subtitle (as set forth in subsection (b)) as the primary aid in statutory construction.

`(b) Purposes- The purposes of this subtitle are as follows:

• `(1) To raise revenue needed by the Federal Government in a manner consistent with the other purposes of this subtitle.
• `(2) To tax all consumption of goods and services in the United States once, without exception, but only once.
• `(3) To prevent double, multiple, or cascading taxation.
• `(4) To simplify the tax law and reduce the administration costs of, and the costs of compliance with, the tax law.
• `(5) To provide for the administration of the tax law in a manner that respects privacy, due process, individual rights when interacting with the government, the presumption of innocence in criminal proceedings, and the presumption of lawful behavior in civil proceedings.
• `(6) To increase the role of State governments in Federal tax administration because of State government expertise in sales tax administration.
• `(7) To enhance generally cooperation and coordination among State tax administrators; and to enhance cooperation and coordination among Federal and State tax administrators, consistent with the principle of intergovernmental tax immunity.