[mythtv-users] Hauppauge USB CableCard Tuner for $129!

[Ronald Frazier]

On Wed, Jul 20, 2011 at 9:13 AM, Tom Bongiorno <two.bits.11 at gmail.com> wrote:
>> Of course, we're supposed to pay the same level of tax on stuff
>> shipped from Amazon, too.
>
> I have been told this many times as if I am involved in some large tax
> evasion scheme.

I don't think he meant that comment to be any sort of attack on you.
Just a statement about something a lot of people don't really
understand.

I will note that, even though you are supposed to pay use tax on all
online purchases that don't collect sales tax, there is still and
advantage to not having the merchant collect the tax, even if you want
to stay within the confines of tax law. Several states have an
estimated use tax option, where instead of you having to track all of
your online purchases, you pay a fixed amount (usually a tiered fee
based on your income). This can work out really well if you buy a lot
of things online.

For example, say you make five $200 purchases over the course of the
year. If you buy through Newegg, you'll pay 7% sales tax on all $1000
(or $70). On the other hand, if you buy through Amazon, you pay
nothing up front. Then when you go to file your tax return, you can
pay the flat amount. A quick look at the NJ tax instructions (page 39,
top left chart) shows that if your income is $75k, your estimated tax
is only $42.

There's a disclaimer below the chart that indicates you can be audited
and owe the additional tax if they can prove you owed more use tax
than the estimated tax. In practice, that's probably exceedingly rare.
Most often, it won't be worth their time to audit you just to get an
extra $50 or so of use tax.

-- 
Ron Frazier