Tax Collection

SACRAMENTO -- Most Internet shoppers in California know that, since Sept. 15, Amazon.com and other e-merchants, have been required to collect sales taxes for online purchases. But, what many are just finding out is that Amazon and some competitors also are collecting California's 7.25% base rate plus any local government add-on sales taxes on combined "shipping and handling" charges. According to California's sales tax collection agency, the Board of Equalization, sales tax should be collected when a seller "makes a combined charge for 'shipping and handling' or 'postage and handling,' " if the invoice does not show the actual cost of the individual delivery.

The U.S. Senate is expected to vote next month on a bill that could require online retailers to collect sales taxes from customers in every state that imposes them. The measure has been bashed by opponents as a tax increase that would cripple small Web businesses. It's not, and it won't. Instead, the Marketplace Fairness Act would eliminate an outdated restriction that favors those who can shop online over those who can't or won't. That's reason enough for it to become law. For much of the last two decades, Internet retailers collected sales taxes only from customers in the states where they were headquartered or had employees.

This post has been corrected, as indicated below. A House committee holds a key hearing Tuesday on a bill that its opponents say would tax the Internet: the Marketplace Equity Act , a bipartisan proposal to let states require online merchants to collect and remit sales taxes. But as The Times' editorial board has argued repeatedly , this isn't about imposing a new tax; it's about increasing compliance with existing law. As in most (if not all) states, California law requires people to pay taxes on any non-tax-exempt item they buy here, regardless of whether they shop online, via mail order or in person.

SACRAMENTO -- California is primed for a strong month for tax revenue after the Legislature's top budget advisor said Tuesday was among the biggest days for tax collection in state history. The state raked in $2.7 billion in income taxes Tuesday, according to the latest figures from the Legislative Analyst's Office. April is the most critical month of the year for income taxes, which are expected to supply more than 60% of general fund revenue for the current budget. So far this month, the state's income tax revenue has totaled $6.02 billion.

The article (April 8) on repayment by state and local governments of $800 million in sales taxes illegally collected is a prime example of what can happen when unrestrained bureaucrats "aggressively" interpret the law to the detriment of the public. I would suggest that you run a series on how small businesses are being treated during audits by the State Board of Equalization. You will find that many small businesses choose to overpay sales taxes because they feel powerless to challenge the "aggressive" interpretation of the law. Furthermore, they don't want to be on the "hit list" of companies to be audited year after year by the Board of Equalization.

Hoping to reduce the backlog of property-tax assessment appeals, the Board of Supervisors on Friday voted to seek state funding to upgrade the property tax collection system. With the board's vote, county officials will begin discussion with the state Department of Finance about participating in the State-County Property Tax Administration Program.

The Supreme Court on Monday gave Congress and state lawmakers virtually unlimited power to collect taxes retroactively, even when a taxpayer is penalized for taking a legal deduction that is later repealed. The 9-0 ruling upholds a 1987 move by Congress to apply tax changes retroactively to returns that were filed in 1986. It is a defeat for a Newport Beach estate tax lawyer who lost $630,000 in estate money when he sold stocks in 1986 to take advantage of a newly created tax deduction.

The state's tax collection agency has voted conditionally to stop collecting by Jan. 22 the half-cent sales tax for San Diego County court and jail construction that was recently ruled unconstitutional by the state Supreme Court. The unanimous decision was approved Thursday by the five-member State Board of Equalization, which collects the sales tax from vendors and turns the money over to the county, said San Diego-area board member Ernest J. Dronenburg Jr.

After 32 years of service, Raymond L. Wells retires today from the county treasurer-tax collector's office knowing he will be hard to replace. Wells knows the complex tax collection system so well that his bosses found it necessary to fill his post with two full-time employees. Wells, 64, will leave his position as assistant treasurer-tax collector amid accolades from fellow workers who describe him as hard-working, meticulous and helpful.

California tax collections broke out of a seven-month slump in August, with income from the state's three major taxes up over the same month last year, state Controller Gray Davis reported Thursday. The revenue jump came despite the fact that receipts from the recent 1.25-cent sales tax increase were far below expectations. That could spell problems for state spending if the trend continues. In all, revenues from the personal income, bank and corporation and sales tax rose by $72 million, or 2.

SACRAMENTO -- A bipartisan trio of lawmakers and a tax official have unveiled bills they say they'll use to save some California investors from getting hit with a collective $120 million in retroactive taxes. One bill would reverse plans by the California Franchise Tax Board to force about 2,000 filers to return the tax breaks they received between 2008 and 2011 on the sale of stock in qualified small businesses. The two-decade-old incentive was aimed at encouraging investment and job creation in California.

JERUSALEM -- Film producer Yoram Globus was arrested for suspected tax evasion and released on bail Tuesday evening, local media reported . The Israel Tax Authority asked for Globus' arrest as part of its investigation of the veteran movie maker. According to a statement from the tax authority Wednesday, Globus withdrew more than $7.3 million from two of his companies in 2005 and failed to declare it as income. Tax authorities calculated the interest on the resulting tax debt that has accumulated over the years at more than $4 million.

ISLAMABAD, Pakistan - The man hired to go after a nation of tax evaders jabs his finger at his laptop screen as he scrolls through a database of wealthy Pakistanis and dissects their spending habits. He stops at the name of a rich man from Peshawar. Everything's there, Ali Arshad Hakeem says: the man's photo, his home in a posh Peshawar neighborhood, his frequent trips to Abu Dhabi, his BMW and a bevy of bank accounts. "We have the universe; now how do we use that universe?"

SACRAMENTO -- Most Internet shoppers in California know that, since Sept. 15, Amazon.com and other e-merchants, have been required to collect sales taxes for online purchases. But, what many are just finding out is that Amazon and some competitors also are collecting California's 7.25% base rate plus any local government add-on sales taxes on combined "shipping and handling" charges. According to California's sales tax collection agency, the Board of Equalization, sales tax should be collected when a seller "makes a combined charge for 'shipping and handling' or 'postage and handling,' " if the invoice does not show the actual cost of the individual delivery.

Los Angeles County Assessor John Noguez and the tax consultant accused of bribing him, Ramin Salari, pleaded not guilty to a long list of corruption charges Thursday. The men, who were arrested Wednesday, are being held on more than $1-million bail each. They are scheduled to be in court again Monday to argue for lower bail and to prove that any money they use to pay it was not acquired through criminal means. Prosecutors allege that Noguez took $185,000 in bribes to illegally reduce the values of properties represented by Salari so their owners would pay lower taxes.

The California tax man cometh, and he's headed for the Internet. State tax collectors are preparing to crack down on renegade Internet merchants who don't collect sales taxes, and nearly 100 new state auditors, lawyers and other specialists are being hired to help over the next three years. The effort comes at a time when state and local governments are scrambling for money after cutting billions of dollars from budgets and trimming public services. The governor has asked voters in November to approve a hike in sales and income taxes.

This post has been corrected, as indicated below. A House committee holds a key hearing Tuesday on a bill that its opponents say would tax the Internet: the Marketplace Equity Act , a bipartisan proposal to let states require online merchants to collect and remit sales taxes. But as The Times' editorial board has argued repeatedly , this isn't about imposing a new tax; it's about increasing compliance with existing law. As in most (if not all) states, California law requires people to pay taxes on any non-tax-exempt item they buy here, regardless of whether they shop online, via mail order or in person.

Amazon.com Inc. for years has fought state efforts to force it to collect sales taxes from its customers. Now, instead of battling the tax man, the company is looking to profit — by hiring itself out as an Internet tax collector. In an abrupt about-face, the company is now offering to handle sales-tax chores for merchants who sell products through its site for a fee equivalent to 2.9% of the taxes collected. The optional service, which is set to roll out Feb. 1, will be offered to Amazon's third-party vendors in all 50 states.