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James H Sutton

James Sutton’s Answers

322 total


  • Do I have to pay the sales tax for a car my father wants to give me?

    My dad wants to give me his old truck. We both live in Georgia but two different counties. My county requires vehicle emissions and his does not. He also wants the tag so I will need to get a new one. My birthday is in Jan so I already have two ot...

    James’s Answer

    Gifts are using exempt from sales tax. Sales tax is an excise tax on the right to buy something or in some states, sell something. A gift simply falls out of the type of activity that is taxable. However, if your father buys the car then gives it to you, then there would be tax on your dad's purchase.

    I hope this helps answer your question.

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  • I have a current personal tax judgment issued by AZ Dept. of Rev., today received another summons from AZDOR for the same tax?

    Original judgment was for a TP Tax about two+ years ago. They refused to allow me to pay a monthly amount I could reasonably afford (Unemployed). What should I do? I must respond, right? Can they get another judgment? Why this action? I have alway...

    James’s Answer

    I agree with the prior lawyer's answer. I would also add that these matter can get pretty nasty if you don't address it head on.

    It is worth noting that just because the state says they won't give you a payment plan you can afford does not mean that you can't be making monthly payments. The balance is likely accruing interest, so paying at least some every month would probably help and possibly look favorable when dealing with the state in the future.

    I also have a concern over the word summons. That implies that a court is involved, but it might not. If this has turned into a judicial matter, then you really do need to get a lawyer involved at least for an initial consultation.

    I hope this helps.

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  • Do i need to apply for Sale Tax Permit?

    Dear All Lawyer, I have been selling online (eBay,Amazon) since Jun-2013 till now. From the day start, i haven't been collecting any sale tax from Texas's customer (my business is in Texas) because i don't have sale tax permit. ...

    James’s Answer

    I agree with the prior answer with one exception. You should inquire anonymously at first and ask if there is some type of voluntary disclosure program in Texas. If there is, then this would be a much better way to clean up this mess and get straight with the least amount of penalties or headaches.

    Also - since you are selling through Amazon, you might have to register and collect in any state where Amazon is registered and collecting.

    Finally - I would pay very close attention to the Marketplace Fairness Act (MFA) in congress right now. If this law passes, then you might have to register and collect everywhere. If you realize how crazy this would be on your business, then you should reach out to your state congressional representatives and ask them to vote NO on the MFA.

    I hope this helps.

    James Sutton, CPA, Esq.
    www.FloridaSalesTax.com

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  • Purchase new truck in fl but title/registeration in il. have tax exempt in il. does fl have right to collect sales tax ?????

    il says will not refund any taxes because of tax exempt but fl is still trying to collect. how do i stop the madness???

    James’s Answer

    • Selected as best answer

    Florida tries very hard to collect sales tax whenever possible, but there are limitations. In your case, it will depends a lot on your exemption in Illinois. Can you provide more details on the exemption.

    If you have not already taken possession of the truck, then the dealer could deliver the truck to you in GA and you could take for registration in IL. Florida would not have a right to tax it because you did not take possession in FL and GA would probably never learn of the transaction because it will not be registered there. This is probably your easiest solution.

    Otherwise, I would need to learn more about the exemption to see if it is something we could talk FL into excepting.

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  • I got a bill for 1450 from the state of new jersey for back tobacco taxes in 2006. is there anything I can do.

    I did not know it was illegal when i finally found out it was i stopped doing it. shouldn't the online store share some responsibility is this a possible class action lawsuit for invasion of privacy they accessed my credit card reciets without tel...

    James’s Answer

    I agree with both prior answers. This is tax you owe and there is likely no statute of limitations as to how far back in time the state could go as you never filed a sales tax return that would start the limitations clock ticking (presuming you are not a wholesaler of tobacco). This is also something that you have no cause of action against the wholesaler unless, possibly, the wholesaler is located in your state, but even then you are likely barred by time.

    Your best bet is to get a good tax attorney that handles the wholesale tax cases in your state. They might be able to negotiate a lesser payment.

    I hope this helps and good luck!

    James Sutton, CPA, Esq.
    www.FloridaSalesTax.com

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  • Are state sales taxes dischargeable in bankruptcy?

    I have some old sales tax liabilities dating back around ten years. If I file chapter 7 , can I discharge these in bankruptcy?

    James’s Answer

    Generally speaking the answer is no - to the business that owes the tax. If this is related to tax the business collected but did not remit, then you probably want your bankruptcy attorney to force as much of your business assets towards this debt as possible. There is the real likelihood that this type of debt can become personal, or even criminal. If, however, this is sales tax that the state determined you should have collected but did not, then it will likely remain a business debt. As long as the business was a separate legal entity, then it likely will not become personal.

    I hope this helps.

    James Sutton, CPA, Esq.
    www.FloridaSalesTax.com

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  • What was the outcome of the new Internet Sales Tax?

    I sale on eBay and have my own website too and use PayPal. At the end of the year Paypal will send a 1099 form to IRS showing total amount sold. As you know this is not the profit. This amount shows all money received. I am assuming IRS will know ...

    James’s Answer

    To directly answer your question, there are not any new federal laws affecting sales tax, at least not yet. There is a bill going through congress right now called the Marketplace Freedom Act that has passed the Senate but appears to be held up in the House of Representatives. Under this law, a company that sells more than $1,000,000 remotely (basically sales outside your home state), then you would have to collect sales tax on behalf of your customers states. You are already supposed to be collecting sales tax in your home state (presuming it has a sales tax and you are selling products that are subject to tax).

    The prior response is correct that you don't appear to have a good understanding of sales and use taxes. Generally, this is a tax on your business for the privilege of selling goods, but you are usually required to pass the tax on to your customer. So this is a tax added onto your selling price and usually paid for by your customer. You must collect the tax and remit the taxes to the state. There are an dizzying amount of rules and you have to keep very, very good paperwork.

    At the moment, the law is merely a proposed law. It has been proposed for 3 years running.

    I hope this answers your question.

    James Sutton, CPA, Esq.
    www.FloridaSalesTax.com

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  • Trying to avoid sales tax on new equipment.

    LLC is in Minnesota but I am operating in Williston, Nd. I am upgrading all my equipment. I Bought new trucks so I am subject to FET tax. It's something I have to live with but is there some way to file for a LLC in another state to avoid the stat...

    James’s Answer

    For large equipment purchasers, the most common plan for minimizing sales tax is to use a leasing company. Create a new leasing company to buy the equipment, then lease the equipment to your operating entity. In most states you can buy the equipment without sales tax as a sale for resale. Then you rent the equipment to your operating company. You may have to pay sales tax on the rental, depending on your state laws, but their is very rarely a requirement that the rental amount be fair market value. Even if you own the equipment through the entire life cycle, the time value of money of paying your taxes later instead of sooner helps. You have to make a business decision whether this is too much trouble and expense for the savings. I don't suggest implementing something like this on your own. Get a local attorney to help that knows your state laws well.

    Some companies also try to register a company in Montana, but your state will likely spot that maneuver very quickly.

    I hope this helps!

    James Sutton, CPA, Esq.
    www.FloridaSalesTax.com

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  • In Maryland do I need to charge sale and use tax on an intangible item?

    In Maryland do I need to charge sale and use tax on an intangible item? For instance a graphical design delivered electronically to client through email. If I delivery it to client on a CD do I charge sale and use tax on the design cost or just th...

    James’s Answer

    Very dangerous question you ask. Every state treats this issue a little differently, but the general rule for sales and use taxes is that electronic delivery is not subject to sales tax and delivery by tangible personal property is subject to sales tax. So the delivery by CD in your example very well might be subject to sales tax and you would be liable for the tax if you don't charge it to you customer. You would also have to be registered to collect and remit the tax with the state. In other words, an electronic delivery method would be a much better business model.

    I hope this helps.

    James Sutton, CPA, Esq.
    www.FloridaSalesTax.com

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  • If I sell books on amazon.com do I have to collect sales tax? I live in Illinois. If so, how do I go about this?

    It's not a business. I just want to pare down my book collection and get some cash.

    James’s Answer

    Not exactly the "correct" answer, but if you are only going to be selling a few books, then use ebay not amazon. The states are ALL OVER amazon for sales tax. Ebay will be a lot less likely to draw scrutiny. Only sell through Ebay to out of state purchasers, and you very likely will be fine.

    The prior answer about isolated or occasional sales is right on point. If you are only sell a couple of books (or sets of books) during the year to IL purchasers, then you should be fine. Sell more and you likely would be considered a dealer if you followed the letter of the law.

    I hope this helps.

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