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Posted by RobMac on 12/30/05 17:25
"Stan Brown" <the_stan_brown@fastmail.fm> wrote in message
news:MPG.1e1f27b27161b609989dbc@news.individual.net...
> Fri, 30 Dec 2005 07:39:17 -0500 from RobMac <rpmccartney@gmail.com>:
>> I just got an email from Netflix (not that I'll be using them much longer
>> anyway) that states the following :
>>
>> "Thank you for being a Netflix member. We are writing to let you know
>> that
>> on January 1, 2006, as required by your state and local tax laws, Netflix
>> will switch from collecting a sales tax to collecting a use/rental tax.
>> The
>> price of your Netflix plan is the same, but this change in tax types may
>> change your full monthly subscription charge slightly and will start on
>> your
>> next billing date."
>>
>> My question is : "What the hell is a use/rental tax" ?
>
> Most (or all) states that have sales taxes have use taxes on the
> books at the same rate. The idea is that if you buy something
> elsewhere and bring it in to your home state to use it, you should
> pay your state the same tax you would have paid if you had bought it
> in state.
>
> We might argue about whether this is fair, particularly since most
> use taxes don't give credit for the tax you paid in the other state.
> (*) But it _is_ the law. New York State, for instance, has a line
> item for this on page 2 of the IT-201 form (state equivalent of the
> Federal 1040).
>
> Retailers must collect sales taxes for goods sold in the state where
> the retailer operates. On the other hand, if the item is being
> shipped outside the retailer's state, the retailer has the option to
> collect use tax or not collect it -- but if collected it must be paid
> to the purchaser's home state.
>
> So I guess that's what Netflix are talking about. But given that they
> don't have to take on that administrative burden, I'm not sure why
> they've decided to do it. You might want to contact your own state's
> sales tax office and let them know Netflix are doing this, so that
> the state can be sure to collect the money Netflix are taking on
> behalf of the state.
>
> (*) Some states do give credit for very-big-ticket items like cars
> and boats.
So if I understand right, if Netflix is within my sate I pay sales tax
(which I've been doing) but now they want to collect use/rental tax instead,
because they're located outside my state, but if that's true why were they
charging sales tax in the first place if not in-state? And if they ARE
in-state how can they charge use/rental tax if it's to collect taxes from
importing into the state from elsewhere?
I'm still confused.
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