The semester before I left for law school, my best friend, Bren, and I packed our stuff into my old Buick Regal (the former family car), affectionately named “Bessie” because she looked like a cow. We were on a mission to examine East Coast law schools that were still on my short list. It was easy enough to noodle up I-95 from Raleigh, NC, with stops in, among other places, Washington, DC (to visit Georgetown) and Philadelphia, PA (to visit Temple). We also had a trip to Atlantic City planned but that’s another post altogether…
The second that we stepped out of the car in Philly, I knew that it would be home. There was so much about the city that I adored - the buildings, the history, the people. I even handed my keys over to an attendant without even noting whether he was really a valet (we didn’t exactly have valet parking in Hampstead, NC).
Bren and I decided to pop into a few stores and “urban up” a little since I had arrived in - not kidding - short denim overalls and Birkenstocks. With my hair in braids and Brooks and Dunn on the radio, I didn’t exactly fit in.
I found a few things that I liked and hustled them over to the counter. When the cashier rang up my order, I was perplexed. It was a few dollars cheaper than I had imagined (and being a math minor, I was usually pretty spot on). The difference? Sales tax.
You see, I hail from the “tax everything” state of North Carolina. In NC, there is sales tax imposed on practically everything, including necessities like food and clothes. In PA, however, there is no sales tax imposed on certain necessities - and clothing fit the bill. For Bren and I, it was the equivalent of an extra discount.
In our case, it was a happy surprise. But many cities and states have used sales tax rates and exemptions as a calculated method of luring shoppers to spend money at their stores rather than somewhere else. In my neighboring state of Delaware, for example, they regularly tout that they are the “home of sales tax free shopping.” Does it work? You bet. Shoppers flock to places like Christiana Mall - particularly in the fall for back to school - looking for sales tax free bargains.
Is that about to change?
Of state tax rates, only South Carolina raised its state-wide sales tax rate, from 5.0 percent to 6.0 percent.
What does all of this mean? Sadly, it’s likely part of a trend. As the economy turns sour, cities and states scramble to find revenue. The federal government is in no position to help. This is particularly devastating for metropolitan areas where the federal government has imposed regulations requiring action on the part of municipalities that might not have the funds to comply. Examples include No Child Left Behind legislation and Homeland Security programs - both are federally mandated but largely funded on the state level.
What about where you live? Are you seeing any difference in sales tax rates?
Taxpayer asks:
Heeello! I was wondering if it is true that my stimulus payment could be taken for outstanding hospital bills I have yet to pay? If so, “How will that help boost the economy?”
Thanks for your time…
Taxgirl says:
The short answer is no. Rebates are being withheld or reduced for federal obligations such as past due student loans, back taxes or child support payments.
However, if you owe money to the government as a result of your care, that would change my answer.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
As tax rebate checks are slowly (with a huge emphasis on slowly) making their way to taxpayers, Congress is considering a second round of relief. This relief would be targeted to homeowners facing foreclosure as well as increased spending on bridges, roads and transit systems.
There may be renewed interest in foreclosure relief because of recent information that 2 million children will be directly impacted by the current crisis. I have to say, as a mother of three small children, my heart goes out those parents who are facing difficult times as a result of the crisis. As a taxpayer, however, I don’t want my dollars funneled to government “relief efforts” to resolve the problems, much of which is directly the result of poor choices by homeowners and no oversight of greedy, uncontrolled lenders.
As for bridges, roads and transit? Yes, let’s fix our transit systems. Maybe then we won’t be quite so reliant on the need to fix bridges and roads… But now? In a fiscal crisis? Exactly how would that help our economy immediately?
It sounds a little FDR-ish, don’t you think?
President Bush opposes a second plan of any kind, choosing a wait and see approach. However, Democrats note that the Iraq war is adding about $12 billion to $15 billion to the deficit each month, with no end in sight. They argue that more money should be spent here in the US to fix the current problem.
I’ve received a ton of complaints about the size of the rebate checks once actually in hand. Apparently, a number of folks have not received the anticipated amount…
To date, the most common mistakes in figuring the rebate that I’ve heard deal with gross income and tax liability. Remember, if you make too much or pay too little in tax, you might not be eligible for the full amount.
I mean, his legal appeal, of course. I don’t get his media appeal - other than White Men Can’t Jump, which was admittedly entertaining, I am not a fan. Blade, in particular, just isn’t my cup of tea.
The IRS has a feature available on its web site where you can check the status of your rebate. Visit “Where’s My Stimulus Payment?” and have on hand your legal name, filing status, Social Security number and number of exemptions shown on your 2007 return. You must have filed your tax return at least six weeks prior in order to get an update.
If your information is not available (mine wasn’t), you’ll receive a message telling you to check the Payment Schedule.
Hopefully, this will put some of your questions to rest. I’d love to hear feedback from those of you who have used the site!
I’ve been getting a lot of email questions about the rebates that imply that all taxpayers are entitled to the full rebate. This is not the case. Here are some guidelines that might answer many of your questions…
You may receive a rebate if:
1, You have a valid Social Security number.
2, You file a 2007 tax return.
Your rebate amount may be reduced if:
1, You owe back child support.
2, You have prior federal tax liabilities (meaning for years 2006 and before).
3, You owe other federal liabilities such as overdue student loans.
4, Your AGI is over $75,000 for a single taxpayer or over $150,000 for married taxpayers.
5, Your net income tax liability is less than $600 for a single taxpayer and $1,200 for married taxpayers (check line 52 of your return).
You will not qualify for a rebate if:
1, You don’t file a 2007 tax return.
2, Your net income tax liability is zero and your qualifying income is less than $3,000. Qualifying income includes wages, net self-employment income, nontaxable combat pay, Social Security benefits, certain Railroad Retirement benefits and certain veterans’ payments.
3, Your AGI is over $87,000 for a single person or $174,000 for married taxpayers.
4, You are can be claimed as a dependent on someone else’s return (so yes, college students still being reported on your parents’ tax return, this means you).
5, You do not have a valid Social Security Number. ITINs are NOT sufficient.
6, You are a nonresident alien.
7, You file any of the following returns: Form 1040NR or Form 1040NR-EZ, Form 1040PR or Form 1040SS.
For more information about rebates, see the lists in the sidebar or search for “rebate” using the nifty lijit feature.
Since it’s still my blogoversary (at least for another couple of hours), here is some more trivia…
I purchased taxgirl.com from the former owner who was no longer using the domain. I had been hoping for awhile that the name would become available since I had been using taxgirl for a number of years as my moniker. I actually negotiated the sale through a third party and paid substantially more for the name than I had ever paid before for a domain.
Since it’s my blogoversary today, I thought I’d randomly pelt you with taxgirl.com trivia…
My logo (the brilliant one above) was designed by artist Jay Bevenour. Jay pitched several variations of the logo to me and I fell in love with this one. I knew that it was the right choice when my daughter looked at the screen and said, “Mommy, that’s you on the computer.”
I mean, his legal appeal, of course. I don’t get his media appeal - other than White Men Can’t Jump, which was admittedly entertaining, I am not a fan. Blade, in particular, just isn’t my cup of tea.
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