Borders Online Sales Taxation Case Study

Topic:Distinguishing a hobby from a business, explaining how legislation and case laws determines whether an activity is a business or hobby. Further to make a comment on the impact of a determination by the ATO on whether a taxpayer’s activity is actually a business.

Located in Washington DC, the Internal Revenue Service (IRS), is the enforcer of laws, especially tax related. The roots of the IRS go back to Civil War times when president Lincoln passed the Revenue Act of 1862. The IRS is a government division of and also controlled by the Department of the Treasury. Besides enforcing tax laws, the IRS is also accountable for the collection of taxes. These types of taxes include gift, corporate, excise, and estate. They are also an important factor in the attainment of money for the government. For the fiscal year, which is a period used for accounting purposes, of 2014, the combined returns of personal and corporate income tax of 149.7 million brought the government almost $2 trillion of

The United States of America is a country well know as “the land of opportunity.” In many aspects this is very true, almost anything can be sought out and accomplished. Of course, the phrase “nothing is ever truly free” goes hand in hand with that. Taxes are the evidence that back up that statement, no matter what you do or buy or sell here the government will always be getting its piece to. We all get taxed for making purchases, for owning a home, for having a business, and even for working to make money. As you can imagine no one ever wants to pay taxes but the taxes collected are used to continue many different programs in our country. Many people don’t

According to ordinary concepts of “resident”, an individual should satisfy the “Common Law test”. In this particular case, Andy spends the last three years working in Thailand, having signed a contract with a Canadian company in Australia, which doesn’t fulfill

The Court ruled that an article manufactured for interstate export does not make it an article of interstate commerce. The Court

Holding- 1.) The U.S. Federal Court of Appeals found that the U.S. Federal District Court has jurisdiction over a foreign state in this matter (Lyon, 2001, p. 2).

And under ITAA97 s6-1, if an individual is an Australia resident, he/she need to satisfy ordinary concepts test or one of three statutory residence tests. So in link with your circumstances, you got the teaching contact of university in England. It is sure that the ruling will directly do another three tests that are domicile test, the 183-day test and commonwealth superannuation test. In the light of your fact, I feel that only the second rule will be looked. Because the second statutory test delimits constructive residence in Australia is attributed to a person who is actually present in Australia for a total period of more than half the income year unless usual place of abode is outside Australia or does not intended to take up residency in Australia and an individual is a resident under third the third test if he/she is a contributing member of the superannuation fund, the fact is that you have recently completed your study and never worked in Australia before. In test two, it will be judged whether you are domiciled in Australia unless permanent place of abode is outside Australia. You are born in Australia and have always lived with your parent before coming to the UK, which means your base-home is Australia. So the important factor to the ruling depends on whether you establish a permanent place of abode outside Australia. We need to consider what your intention, family business and assets are. There are some similar cases can be referred such

As the Gambling winnings and losses related to an occasional gambling habit, the income is non-taxable and the losses non-deductible. There will be an allowable

This situation essentially boils down to a matter of respecting federal and state law. This is due to

Mr. Jones there was discussion of closing out your 401(k) and using that to help fund the business but I do not recommend doing so. Since you are over 59.5 years of age you will not have to pay a penalty for withdrawal however you will have to pay income taxes on the funds. Since you will be receiving a salary and potential bonus from the new corporation this could cause you to pay higher taxes. Also by withdrawing the funds it could reduce your retirement benefits for later when you look to actually retire. We can discuss retirement plans for the new corporation as well which can help you and potentially your daughter should you still hope to have her as a 40% owner.

1. Why is it so difficult for the IRS to analyze the taxpayer data it had collected?

Generally, purchasers can acquire another business through either an asset sale or stock sale. Since sales tax is maybe imposed on the sale of tangible personal property, the acquisition of a business enterprise through a stock sale generally will not be subject to sale tax. For other good and valid reasons, however, purchasers may want to structure the acquisition of the business as an asset sale. These asset sales, where all or part of the business’s assets are transferred, are commonly referred to as bulk sales for sales tax purposes. Since these asset sales or bulk sales constitute, at least in part, the sale of tangible personal property, they will be subject to sales tax unless a specific exemption applies. A common exemption available to purchasers for asset sales is the “occasional, casual or isolated sale” (“occasional sale”) exemption. An occasional sale exemption generally will exempt the acquisition of assets that are sold in bulk or otherwise outside of the ordinary course of business. Most states provide such an exemption, although the scope of the exemption varies among states. Many states also specifically exclude the transfer of inventory from the occasional sale exemption since the transfer of these items is within the ordinary course of business. A purchaser may avoid the imposition of sales tax on inventory, however, by providing a resale exemption certificate to the seller at the time of purchase. Many states require one

There are some current strategies states are pursuing. These policies could enforce equity with all retailers and make them subject to the same tax requirements. The 1992 ruling declared retailers must collect sales taxes only in states where they have a physical presence or other tangible “nexus,” unchanged. Some believe this policy should be updated. Today, software and related tax services have for the most part, eliminated the difficulty in calculating and paying sales taxes for the country’s many state and local

This paper will provide a brief comparative history of both companies and demonstrate why Amazon is thriving while Borders is not. "Indeed, there's an irony in its demise, for as Borders is blamed for killing off some local independents, now it has been done in by Amazon and the Internet. The circle may go 'round again: Former customers may turn to independents, if their towns have them. Or, if they rule out their local chain, maybe they'll just go back to browsing on

Throughout the country, states are not collecting some or any taxes on online transactions. This debate has been brought to Congress, state, and local governments as to whether taxes should be imposed on online transactions as well as who should standardize online taxing. Research shows that the estimated revenue losses in excess of $60 billion alone from online transactions. This number is only to grow with increased use of ecommerce. (McClure 2000)