Re: [PLUG] (OT) DSL and Taxes

["William H. Magill" <magill@mcgillsociety.org>]

On Monday, February 10, 2003, at 01:03  PM, Jeyes, David (371) wrote:
> > From: John Lavin wrote:
> >
> > Federal: 1.50 (2.5%)
> > Statutory Gross Receipts: 1.75 (3%)
> > Sales Tax: 2.10 (3.5%)
> >
> > I'm in the burbs, but your State and Federal shouldn't differ
> > from mine.
> > something sounds wrong.
> >
> > Regards,
> > -john
> >
> Is that with Speakeasy?
>
> I called our state revenue department, and they advised me to request 
> a written explanation of these charges from Speakeasy. Our Sales tax 
> is 6%, so maybe your provider is eating some of it,

That is not legal for them to do. Assuming that you are in 
Pennsylvania, the 6% (.06) Sales tax is STRICTLY top be paid by the 
consumer, while the seller is required to collect and remit the 
collections, it cannot come out of their "revenue stream." This sounds 
like somebody has gotten Arthur Anderson to do their books.

Note that if you are in Philadelphia County, or if the place of 
business of the vendor is; you also pay a 1% Sales tax surcharge for a 
total of 7%.

The Fedral tax also seems wrong, if there even is any.

I have no idea what a "Statutory Gross Receipts" tax might be. It 
doesn't exist in Pennsylvania. Philadelphia has one, but it is not 
possible to compute it on an individual transaction basis, nor is it 
"legal" to itemize it and pass it along to the consumer. It is a "cost 
of doing business," just like Social Security or Unemployment taxes 
paid by the business.  If the business "charges" a consumer for a 
"gross reciept tax" that amount is part of the gross receipt of the 
business and is ALSO subject to the tax.

The one caveat to this is the game that Communications companies try to 
play to convince you that their prices are declining and not going up. 
(HR departments try this also by telling you that Uneployment Insurance 
and Social Security are part of your "benefits" package.) Cable 
companies and Phone companies have taken to itemizing charges that 
really can't be "broken out." While not particularly illegal, they are 
at best a marketing ploy -- trying to convince you that the $29.95 that 
they advertise is an all-inclusive price, when in fact it is only the 
starting point. However, it is true that your bill will be dramatically 
higher when all of the various "hidden surcharges" are itemized and 
applied than the rate which they quote you. This game would be like the 
oil companies telling you that gasoline only costs a dollar a gallon 
when the price you pay at the pump is actually $1.67 with the 67% worth 
of state and federal taxes added in. (I think the rate is still only 
67%, I haven't looked for more than a year.)

T.T.F.N.
William H. Magill
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magill@mcgillsociety.org
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