Skip to main content

Funding Woes and the California Use Tax

California is in the midst of a horrible budget crisis. The Governor decided to cut 10% across the board, resulting in huge cuts to public education. I read somewhere that the state looses a couple of billion dollars in revenue a year due to people ignoring the California Use Tax. These are taxes we're supposed to pay on out of state purchases, like most Internet purchases from sites like Amazon.

In previous years it was pretty easy to ignore the California Use Tax while preparing your taxes with Turbo Tax. I vaguely remember it as a checkbox in some page containing other checkboxes. The explanation was a bit obscure as well. If you were supposed to pay taxes on your Internet purchases, you would have thought he software would have made this requirement explicit. It looked so tentative in the page, that it was too easy to completely ignore. Reading more about it you find out that you could always pay these taxes later by contacting the California Equalization Board, which could be why the Turbo Tax designers felt they did not have to present this tax in more explicit terms.

But that's all changed this year. I used the Premier version of Turbo Tax for the Mac and this time, the California Use Tax was presented clearly, in its own page with an adequate description of what it is. Much, much better.

For a few years now, since I found out about this tax, I've been reporting it. This is how I do it: during the year I save all my email receipts of online purchases in a special mailbox. At tax preparation time, I scan all these emails for the given year, add up the total and enter it into the box. Easy.

The tax impact is your local sales tax of the total spent that year. In San Mateo County it's 8.25% and the resulting difference in my taxes is pretty small.

It will be interesting to find out if more people start paying this tax now that Turbo Tax made the interface more explicit...

BTW, Turbo Tax gets better very year. Now, if only Quicken for Mac was half decent. I've wondered for a while why Apple did not start their own financial application. I assume they're still hoping Intuit will come through with a good effort on the Mac.


  1. I had the same experience - didn't realize I owed this tax in previous years, and ran into it in Turbo Tax (deluxe).

    It's clear we owe it - for that $2,300 TV I got, for all those Amazone gifts and DVD's - money I had thought was just 'saved' by buying out of state where I was not charged sales tax.

    But it's also clear that perhaps 99% of people don't pay this tax - leaving it unfair, a 'tax on the honest people'.

    Is the improvement to TurboTax going to increase the number of intentional tax cheaters? I suspect it will.

    It'd be nice to see some approach found to either make everyone pay fairly, or no one, not just the 'honest people'.


Post a Comment

Popular posts from this blog

High Def, Low Def and Now Ultra Low Def TV

High Definition TV is great, amazing, a must have for sports. How did we ever manage to watch soccer games without it? Unfortunately, I'm forced to remember the horror every weekend, where I move from Barcelona's glorious HDTV courtesy of GolTV HD to Boca's horrific, ultra low def, courtesy of TyC Sports.

I claim that the video quality we get from TyC for these Argentinean soccer games is lower than Low Definition. Games look, really, really bad, much worse than low definition games you see on ESPN or even Univision. I don't know why, but here's the evidence.

What follows is snapshots of my LCD TV, with signal from DirecTV, comparing High Definition to whatever this other thing is. I used my digital camera, taking pictures at max resolution.

First, a snapshot of this weekend's Barcelona Vs. Osasuna game.

Very pretty. Now here's the capture of today's glorious Boca Juniors victory over Huracán.

To highlight the differences even further, I took a picture …

Should I move to Redwood City and send my kids to its Public Schools?

A coworker recently asked me the following question:
I have a 2 year old daughter and we're considering buying a house. Redwood City is more affordable than other communities, but I'm worried about the public schools. So, should I consider moving to Redwood City?
The short answer is a resounding "yes!". I have two daughters, ages 13 and 11 who have experienced the Redwood City Public School system first hand and all the way through. For elementary school, both went to Orion, a wonderful, very small school based on parent participation. The school is cozy and beautiful, the teachers are great, and the community is incredible. A fantastic experience.

Orion, ends in 5th grade and before High School you have to pick a Middle School. The default choice is Kennedy Middle School, the largest middle school in Redwood City. Both my daughters are now at Kennedy, one in 6th grade, the other one in 8th. Kennedy is a completely different experience. It's large and diverse, admit…

Fun with iMovie 11 trailers

iLife 11 came out recently and while there are a number of improvements everywhere, the Trailer templates in iMovie steal the show. The idea is simple: provide project templates that allow anybody to create professional looking trailers. So professional they look that Apple won't allow you to enter the name of a real studio for fear people will think they're watching an actual movie trailer!

But words are cheap. Here's an example trailer, done entirely by Mijal, my 12 year old daughter, from video she took herself on a point and shoot digital camera:

What's amazing about this is not only how easy it is to make trailers, but also that any video, no matter how inane or unexciting results in a trailer that promises lots of action, thrills, and fun.

Creating a trailer is amazingly easy. You get a template with placeholders for text and video clips. The transitions, music, and title sequences are canned and ensure the proper rhythm. You drop clips onto each slot and then op…