Thanks to Addison Wiggin over at the Daily Reckoning for this tasty bit of information about Stucky’s favorite state – New Jersey. Read it and be amazed!
These idiots are proposing that if you have a gift card that hasn’t been used in two years, they are going to come after you for the sales tax on the unspent amount represented by the card!! Cab you believe it? Insanity. Why don’t they just round up 200 people, line them up and rob them at gun point and be done with it.
Just think! You get a $100 gift card for your birthday, stick it in your desk drawer and forget about it. Two years later you get a bill from the state for the sales tax on $100 you didn’t spend. Think about that for a while.. Then get pissed.
Stucky, you are welcome to New Jersey, I don’t want any of it.
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By Addison Wiggin
04/03/12 Baltimore, Maryland – The state of New Jersey wants to tax the value of unused gift cards.
We’ll let that sink in for a bit.
“The state will soon begin requiring gift card sellers to obtain ZIP codes from buyers so it can claim the value of cards not redeemed after two years,” according to an Associated Press story.
If you have a two-year old gift card sitting around, you can still use it as long as it’s not expired.
“But if the state has already laid claim to the money,” says the AP, “businesses might have to jump through administrative hoops to get reimbursement — and therefore stop selling gift cards altogether to avoid the hassle.”
American Express’ gift card unit is already bailing from the Garden State.
For the moment, no other state is trying this. At least not until the scads of litigation that resulted from New Jersey’s gambit get sorted out in court.
Meanwhile, scores of businesses in New York City are suddenly learning they’re in arrears on three years’ worth of taxes they didn’t know applied to them.
The city has decided yoga studios must pay a sales tax covering businesses devoted to “weight control” or “health salons.” Audits are underway.
“Yoga classes have been around forever and not taxed,” protests Alison West of the lobbying group Yoga for New York. (In other news, yoga studios have a lobbying group in New York.)
“Last Monday afternoon,” reports The Wall Street Journal, “more than 70 yoga managers, studio owners and instructors sat down in the lotus position to discuss the tax issue — and other troubles — at Yoga Union, a studio in the Flatiron District. West said the atmosphere was ‘concerned, dynamic and productive.’”
Bummer. It’s going to be hard to meditate this bill away.
In Connecticut, what critics have dubbed the “Priceline tax” is working its way through the legislature.
“The proposed bill,” says State Rep. John Piscopo, “would impose a new tax on travel services by subjecting service fees charged by travel agents and other intermediaries for facilitating hotel bookings in Connecticut to the state’s hotel occupancy tax.” That includes outfits like Priceline, Orbitz, and Travelocity.
That’ll be a killer for the sort of quaint mom-and-pop bed-and-breakfast places at the heart of New England tourism; they count on the online outfits to do the bulk of their marketing.
We chronicle these “new taxes and weird fees” to make this point: State and local governments are getting desperate for new sources of revenue. State revenue alone fell $50 billion in 2008-09, Federal Reserve figures show.
“According to experts, it will be years until states have recovered enough to restore services to pre-recession levels,” says U.S. News and World Report.
In the meantime, you and the local businesses you patronize are looking more and more like a milk cow to legions of bureaucrats.
Stucky says:
I will only be in New Jersey until April 18th. More on this next week. Unfortunately, I am going to an even more fucked up state. Yeah, I know, that’s hard to believe.
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3rd April 2012 at 7:25 pm
Zarathustra says:
Dont’ bother calling Gov. Christie. He has more important matters to attend to, such as wearing a Yarmulke and praying at the wailing wall. Who sez he doesn’t kiss ass?
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3rd April 2012 at 7:34 pm
Kill Bill says:
You are going to Philly Stucko?
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3rd April 2012 at 7:35 pm
WIP says:
MA
“Just think! You get a $100 gift card for your birthday, stick it in your desk drawer and forget about it. Two years later you get a bill from the state for the sales tax on $100 you didn’t spend.”
I don’t think you meant that literally, right? They would only be able to track down the BUYER of the card not the RECIEVER.
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3rd April 2012 at 7:44 pm
Kill Bill says:
Gift cards generally are considered taxable income. The Internal
Revenue Service (IRS) tax code, found in 26 U.S.C. §132(e)(2),
indicates that employee recognition awards “generally should be treated
as taxable income to the employee, unless it meets the de minimis
standard for exclusion because the award is of such a small value that
accounting for it is administratively impracticable.” The IRS regulations
at 26 C.F.R. §1.132-6(c) go on to explain that the provision of cash to an
employee is not excludable as a de minimis benefit.
That same IRS regulation section explains that gift certificates are
regarded as cash under the tax code. Specifically, the regulation states
“a cash equivalent fringe benefit (such as a fringe benefit provided to an
employee through the use of a gift certificate or charge or credit card) is
generally not excludable under section 132(a) even if the same property
or service acquired (if provided in kind) would be excludable as a de
minimis fringe benefit.”
So, for example, the $25 gift card would be taxable while the gift of a
turkey or ham would not be. Similarly, other small, infrequent tangible
gifts such as fruit baskets, theater or sporting event tickets, and group
meals typically are not considered taxable.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
So, even if you dont spend the gift card its still income according to the IRS. I guess they figure that the ‘income’ just sitting in an account, even if its not spent, is still income.
If NJ passes this I expect other states to follow suit.
Any wagers that no politicians will work to change this tax code?
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3rd April 2012 at 7:47 pm
Hope@ZeroKelvin says:
Soon these maniacs will be taxing you on the money you have stashed in your mattress, it is the same concept, taxing you on money you are holding but not spending.
Bastards.
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3rd April 2012 at 7:52 pm
Craig says:
This is such bullshit. When you purchase card there is no record of who the sale was made with. Unless this is done on the users end when they try to use the card, there is no way to enforce this.
No one is going to get a bill in the mail as the poster states. There are no records of ownership. If a law was created to pass the tax at the time of sale than holders of the cards would use them out of state or sell via eBay, craig’s list or some other medium.
Complete bullshit. There are so many other ways for government to raise revenues.
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3rd April 2012 at 10:06 pm
Thinker says:
And then there’s Illinois, where they instituted a tax on anything you bought out of state but brought back to Illinois to use. So, even if you paid tax in the state where you bought it, you have to pay Illinois sales tax on it, as well. Oh, and the kicker? They made it retroactive for the past three years.
Muck’s right; governments are getting desperate. It’s too bad they can’t conceive of cutting spending instead.
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3rd April 2012 at 10:06 pm
NoEffingWay says:
“And we’re marching to Bastille Day…”
Welcome to California Stucky
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3rd April 2012 at 10:14 pm
DaveL says:
“Just think! You get a $100 gift card for your birthday, stick it in your desk drawer and forget about it. Two years later you get a bill from the state for the sales tax on $100 you didn’t spend.”
Did the fucking moron who proposed this contemplate the possibility that some of those recipients live on the border of PA, NY, or Del, and could have spent the money there? What a maroon!
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3rd April 2012 at 10:20 pm
AWD says:
“I need that tax money, you cheap sons of bitches, I have a 30 double-cheeseburger-a-day habit I have to maintain. Hand over the cash losers, you’re stupid enough to live here….”
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3rd April 2012 at 10:25 pm
Stucky says:
“This is such bullshit. When you purchase card there is no record of who the sale was made with.” — Craig
Ding! Ding! Ding! Craig hits the nail squarely on the head.
Even as I type, I have a $25 Barnes and Noble gift card in my wallet. Ms Freud’s daughter gave it to me for Christmas. Now, exactly how in the hell will the government know I if I don’t use it in two years???
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3rd April 2012 at 10:39 pm
AKAnon says:
Cool, now here’s a tournament I can get into-Where is Stucky moving? We have bets on Philly & Cali, but (bad as they are), I’m not sure they are worse than Joisey. My bet is on Illinois, for any number of personal reasons. Thinker’s tax post is on the (long) list, but Rahmbo/Daleys’ gun rights policies are at the top. Illinois (and Chicago in particular) is truly, royally, fucked up.
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3rd April 2012 at 1:01 am
stan says:
In the years to come, there will be a fart tax, ( Algore has already tried to pass this on cows) a breath tax, a flush tax and probably a sex tax.
In the future, if you daydream about what you would do if you won the lottery, you will pay a ” what if” tax. You will be taxed on your daydream purchases. Daydream about buying a new car? Boom, you pay taxes. Daydream about a new house with a maid and cook? Boom, taxed!! GOTCHA!
Barack Hussein Obama will in his 2nd term, which will be a perpetual term, will suspend the writ of habeas corpus and declare himself to be supreme law lord and leader. He will suspend the supreme court for trying to undo his good work and declare martial law ” for the good and safety of American”
He will confiscate all gold -even jewelry and teeth. If you have any unused gift cards he will take them too. Of course he will do these things not out of any hubris or love of power or any selfish reason, he will do it to serve and protect his people.
He will also shut down all “subversive” blogs. He will set up the “People’s Court ” and appoint somebody like Rev. Wright or Bill Ayers as the new Roland Freisler.
And all guns will be taken away from the people. Knives too.
Nah, just kidding. Dear leader would never do any of that!! He is a saint!
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3rd April 2012 at 5:36 am
Stucky says:
“Cool, now here’s a tournament I can get into-Where is Stucky moving? We have bets on Philly & Cali, … My bet is on Illinois”
One of those answers is correct.
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3rd April 2012 at 5:40 am
Tim says:
Stuck – I vote for Philly.
Here’s a little tune re-done by SRV; apropos for this topic.
http://www.youtube.com/watch?v=frxPNf9K9ps
(How do I turn this into linky?)
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3rd April 2012 at 7:30 am
Tim says:
Nevermind. It turned into linky on it’s own. Sometimes, you just have to want to change.
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3rd April 2012 at 7:31 am
efarmer says:
AWD,
You may need to seek professional help on your obsession with big boned people.
EF
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3rd April 2012 at 7:49 am
sensetti says:
Christie is rather wide
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3rd April 2012 at 10:25 am
TeresaE says:
In Michigan we are taxed on ALL and ANY out of state purchases. Technically, the law has been this way for a minimum of 20 years, and many, many other states have the same law. The residents just haven’t been informed yet.
In Michigan when we hit the offshoring wall in ’04/’05, the state (while talking about cutting employees) added thousands of auditors to comb the internet, find companies that were shipping within Michigan, then go after the buyers for their unpaid sales tax liabilities. Many citizens were buying things like liquor and cigs sales tax free. The paper’s abounded with stories of people getting hit with bills for $20k for cig tax. Additionally if you hold a garage sale or sell a couple items on Craigslist or Ebay, you owe the state their full 6% sales tax on your sales. Even if you paid the 6% when you bought the item at full price years ago. Doesn’t matter, you “owe” them.
When I was in Jamaica, I checked into buying some rum. To bring the rum home, there was a multi-page legal document that assessed my Michigan import duties and liquor tax (plus a “handling fee”) of around $50 a bottle. They nicely pointed out that even if I landed in another state and consumed said liquor in that other state – thus having never physically brought a drop of Jamaican rum into Michigan – I would still owe the taxes. Helpfully, the form informed me that if not remitted within 20 days, I “might” be visited by a state liquor revenue agent. Shockingly, I chose not to buy rum.
Companies that sell gift cards are able to legally collect untaxed revenue. Income taxes are NEVER paid on the sale of gift cards, only upon their redemption.
Which means the states are losing out on both your sales tax (from not purchasing) PLUS the income tax on the transaction.
How horrible of you all to think that the state should be stiffed. They DESERVE their money! Jobs depend on it! [/sarc]
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3rd April 2012 at 10:54 am
Stucky says:
sensetti
Nice pic of Biggy Christie!
The Bible says at the 2nd Coming Jesus will descend from heaven to the Mount of Olives — where the Temple is — and that the mount will be split in two by a great earthquake.
Looks like Christie is trying to create that great earthquake on his very own.
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3rd April 2012 at 11:37 am
Stucky says:
TeresaE
Sure, you bought that booze in another state and drank it there. However, upon returning to Michigan you would, no doubt, be using the state’s sewer facilities as you piss away your wanton boozing. Therefore, the state has a valid claim for your use of their toilet services.
Other than that Michigan is very bad place (politically). Very bad.
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3rd April 2012 at 11:43 am
AWD says:
Stucky is moving to Illinois? Holy shit…
Christie is a fat fuck, and a typical American.
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3rd April 2012 at 11:47 am
Thinker says:
AKAnon, you left out the “red light” cameras that Rahmbo is putting in place around all schools to instantaneously ticket anyone going over the school-zone speed limit (at ANY hour of the day, not just school hours).
It’s to “protect the children,” of course. But everyone, including the media (!) knows it’s a revenue-generating scheme.
Stucky, want to buy a condo on Lake Shore Drive? Great view… wide open space…
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3rd April 2012 at 6:13 pm
Stucky says:
AWD
What makes you think it’s Illinois? My sons live in Michigan.
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3rd April 2012 at 7:11 pm
llpoh says:
I doubt Christie had anything to do with it. Dems run the legislature in NJ, I think.
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3rd April 2012 at 8:27 pm
BiggyTmofo says:
Yep jail is too good for these phsychopathic criminals called politicians. Our former county auditor and county commissioner are going to jail for almost 50 years total and no canoli for either of them. WIth that record to even consider giving government more money is insane and a threat to our existence or at least pocketbook. The tax a pisst and shit routine is no joke as our water and sewer bill are going up 400% to pay for needed improvements. And pundits wonder why the Cleveland area has been circling the drain for so many years. The carcass has no more to take off of it.
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3rd April 2012 at 10:52 pm
Stucky says:
llpoh
So solly. You’re wrong.
These kind of guys run New Jersey.
You think I’m kidding. Dontcha?
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3rd April 2012 at 10:58 pm