[Utah Binger]

As a retailer I find that the worst taxing authority there is is the state sales tax folks. I hope we're not saying that they get the power to audit, audit, audit the fair tax, because they are truly just like the gestapo.

Also, I'm slightly confused. Lets say I sell a collectors piece of fine art for 10,000. If the tax is inside that number, who eats the 23%?

[navyguy]

Hi UB,

The Fair Tax only applies to Fed taxes, not state taxes. The state would have no jurisdiction over it so its hard to see how they might use it against you.

Regarding your question... If you have a retail item that costs 100 dollars, about 23% of the cost of that item is embedded fed taxes. The FT eliminates those taxes and replaces them with a retail sales tax. But in the case you mention, where you are dealing with a work of art, I don’t THINK it would be taxed simply because there is no wholesale -> retail markup on it and there are no real embedded taxes. Its an interesting question though. Maybe Man50D or one of the other folks can jump in on this.

[Man50D]

I hope we're not saying that they get the power to audit, audit, audit the fair tax, because they are truly just like the gestapo.

States could only collect the tax Fair Tax FAQ #25. The federal government would enforce the regulations.

Also, I'm slightly confused. Lets say I sell a collectors piece of fine art for 10,000. If the tax is inside that number, who eats the 23%?

If the piece is used(previous owner)There will be no tax. I'm not sure what you mean by eat but for a new piece the retailer will collect the tax and receive a fee of .25% of federal sales tax collected and remitted Fair Tax FAQ #24. Keep in mind retailers in 45 states already collect a state sales tax so collecting a federal sales tax won't be an additional burden.