Yikes - Additional California Tax Rules re Amazon Purchasers
There has been plenty of recent discussion about the California Amazon Internet Tax and PayPal's new reporting of all transactions. Even some threads about whether income needs to be reported if not on a 1099. This could be bigger.
Although California SB 86 has not received much notice, it will get major media play next spring as 2012 tax filings are prepared
SB 86, which was signed into law:
1 - Allows California to take your reported income and apply an estimate of how much sales tax should have been paid but was not (by companies such as Amazon), and thus how much use tax you need to pay.
This will be on tax returns that all California residents have to sign under penalty of perjury.
Expect major complaints against Amazon as Californians are suddenly socked with this tax.
You either have to pay the amount California estimates you owe, or be able to prove you owe a different amount.
2 - If you owe any California tax (such as the sales taxes Amazon did not pay), there is a new tax code (section 19266) which lets the state compile an electronic list of taxpayers owing money.
Every financial institution in California must match the list quarterly with its records, and send to California what it wants to know about you. This includes your name, address, tax id number, bank account number, etc.
You're gonna love this - 19266(d) PROHIBITS your bank from telling you that your financial records are being sent to the state.
(This is to prevent you from emptying out your account before the state can grab it.)
Since the amount is owed, the state is authorized to simply seize the money from your bank account.
I don't know about you, but I'm sure a lot of people would rather Amazon pay a sales tax than have to keep track of every receipt and purchase made over the Internet, and have their bank accounts be reported to the state for automatic "withdrawals" because something is owed.
.
Although California SB 86 has not received much notice, it will get major media play next spring as 2012 tax filings are prepared
SB 86, which was signed into law:
1 - Allows California to take your reported income and apply an estimate of how much sales tax should have been paid but was not (by companies such as Amazon), and thus how much use tax you need to pay.
This will be on tax returns that all California residents have to sign under penalty of perjury.
Expect major complaints against Amazon as Californians are suddenly socked with this tax.
You either have to pay the amount California estimates you owe, or be able to prove you owe a different amount.
2 - If you owe any California tax (such as the sales taxes Amazon did not pay), there is a new tax code (section 19266) which lets the state compile an electronic list of taxpayers owing money.
Every financial institution in California must match the list quarterly with its records, and send to California what it wants to know about you. This includes your name, address, tax id number, bank account number, etc.
You're gonna love this - 19266(d) PROHIBITS your bank from telling you that your financial records are being sent to the state.
(This is to prevent you from emptying out your account before the state can grab it.)
Since the amount is owed, the state is authorized to simply seize the money from your bank account.
I don't know about you, but I'm sure a lot of people would rather Amazon pay a sales tax than have to keep track of every receipt and purchase made over the Internet, and have their bank accounts be reported to the state for automatic "withdrawals" because something is owed.
.
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