Expatriate Owl

A politically-incorrect perspective that does not necessarily tow the party line, on various matters including but not limited to taxation, academia, government and religion.

Sunday, July 04, 2010

Disarming the Tax Cheats

It happens every year around this time. Some Fourth of July reveler gets injured while playing with illegal fireworks (and a disproportionate number of them seem to be firefighters, law enforcement officers, or spouses or kids thereof).

It is only the 3rd of July, and Long Island has already scored at least one this year. Seems that one Eric Smith, of Islip Terrace, had his arm severed in a mishap involving a 3-foot mortar tube.

[If truth be told, I actually have some amount of empathy for Mr. Smith. Suffice it to say that there was a time in my youth, many years ago, when I myself was into fireworks. I am now older and wiser. I do hope that the surgeons at Southside Hospital are successful in reattaching Smith's arm. And, if truth be told, even as I draft this posting, I look out my window and enjoy the view of fireworks lighting the night sky, such fireworks, in all likelihood, having been launched from the back yard of a certain neighbor less than a quarter mile away, and, beyond a shadow of a doubt, illegally.].

Smith no doubt will be nominated for a Darwin Award, and other bloggers will certainly opine what a shmuck the guy must be. This posting will forego such commentaries, and focus on the tax aspects of the case.

New York imposes a Sales Tax. In Suffolk County, the rate is 8.625%, of which, 4% goes to the State and 4.625% goes to the County. But you cannot legally avoid the Sales Tax by purchasing items out or state, because New York also imposes a Use Tax, which amounts to New York's Sales Tax, minus any Sales Tax actually paid to another state. And the Use Tax also includes transportation charges paid to bring the goods into New York. And New York's personal Income Tax form has provisions for reporting and paying whatever Sales and Use Tax shortfall you may have racked up during the prior year.

I am not personally familiar with the facts and circumstances regarding how Mr. Smith obtained his fireworks. Nevertheless, the smart money says that their procurement gave less than full regard to New York's Sales and Use Taxes. And a 3-foot mortar tube is not an inexpensive item.

Given all of the whining and pissing and moaning from Albany and elsewhere regarding the budgetary woes of New York State, perhaps the New York State Department of Taxation & Finance should ramp up its tax enforcements. One area where this can be done is in the Sales and Use Taxes on illegal fireworks. The NYSDTF should send Smith a letter to remind him of his Sales and Use Tax obligations regarding the fireworks. More to the point, the NYSDTF and the Suffolk County Police ought to collaborate on this one.

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