Real Estate Excise Tax or Transfer Tax Considerations

By: Abraham Williams | Posted: 03rd February 2011

Your business activity must be included on a federal tax return. Which return and when it's due will depend on your choice of entity selection. If you are a sole proprietor or a single member LLC, put it on schedule C of your individual tax return (form 1040). Otherwise, it goes on a separate tax return. If you had expenses only but no revenue, you should still complete a return to utilize the loss either this year or to create a net operating loss carry forward or carry back.

Article 265 of the Constitution said that no tax shall be levied or collected save by authority of law. No person can argue that service tax is being collected without authority of law- after all there are various clauses of Finance Act of various years authorizing levy and collection of service tax. So what if these clauses are not clear-Article 265 didn't refer to clear law. So what if these clauses are not certain- Article 265 did not refer to certain law. Thus I am sure that administration of service tax is not at all violating any word of the Article 265 of the Constitution. And spirit of any law is or was never important to the tax administrators.

The ambit of this definition cannot be restricted by any term used after the term "includes". It is an inclusive definition. The word includes is a phrase of extension and not of restrictive definition. Include is used in interpretation clauses in order to enlarge the meaning of the words or the phrases used in the definition. In State v. Montello Salt [98 Pac. 549], the court held that it is a well known rule of interpretation that the word "includes" is used as a word of enlargement and ordinarily implies that something else has been given beyond the general language which precedes it. In Taj Mahal Hotel v. CIT [AIR 1969 A.P. 84], the court held that where the term include is used in interpretation clauses then the words or phrases occurring in the body of the statute must be construed as comprehending, not only such things as they signify according to their nature and import but also those things which the interpretation clause declares they shall include. The Supreme Court confirmed the view in case of CIT v. Taj Mahal Hotel [1971 (82) ITR 44 (SC)], and held that include conveys wider meaning. It gives wider meaning to the words or the phrases used in the statute. It is usually used in interpretation clause in order to enlarge the meaning of the words in the statute.

States permit the creation of special assessment districts (typically for provision of water or removal of sewage, or for parks, public transit or schools) whose boundaries may be independent of other boundaries and whose income may be from one or more of service assessments, property taxes, parcel taxes, a portion of road or bridge tolls, or an additional increment upon sales taxes in addition to the non-tax fees for services provided (such as metered water). State government is financed mainly by a mix of sales and/or income taxes and to a lesser extent by corporate registration fees, certain excise taxes, and automobile license fees.

When the U.S. entered into World War I the need for revenue greatly increased. Over the next few years the tax on incomes was increased several times, starting with the 1916 Revenue Act. The War Revenue Act of 1917 reduced exemptions and raised the tax rate again. The 1918 tax act raised the bottom tax rate to 6% and the upper rate to 77%.

This information was located in a report dated April, 2008 by the Treasury Inspector General: "The IRS estimated that between 13.9 million and 15.9 million business taxpayers would be eligible to claim the TETR and approximately $5 billion were owed." They also noted that As of November 24, 2007, approximately 721,410 of the 12.8 million business taxpayers who filed their returns made Federal Excise Tax claims of $876.6 million. This accounts for only 5.6 percent of the estimated number of businesses that could have claimed the credit and only 17.5 percent of what was collected. This means there is still over $4 Billion dollars left to be claimed by the US Taxpayers.

If you are a manufacturer creating taxable supplies in the UK or EC, you should complete form VAT 1. Distance merchants need form VAT 1A. If you are primarily an acquisitions dealer, you need form VAT 1B. Form VAT 1C is for manufacturers of relevant supplies, as set forth by HMRC. Form VAT 2 is for partnership businesses. VAT 68 is for those that purchase an existing business and plan to keep the existing VAT number. You can appoint a tax representative using form VAT 1TR.

Both options have their benefits. By doing a double closing, this isolates your tenant buyers from the owners, and the owners never know how much is actually being paid for the property. This is helpful because sometimes there are hard feelings at the end if the owner feels you are making too much on the deal. Of course like I mentioned before, there is that pesky double excise tax as the downfall to this.

Purchases made before January 1, 2010, may qualify for this deduction under the American Recovery & Reinvestment Act of 2009. A qualified motor vehicle includes a passenger automobile, light truck, or motorcycle, the original use of which, begins with that purchaser, and has a gross vehicle weight rating of 8,500 pounds or less. Purchases must occur after February 16, 2009 and before January 1, 2010.About the Author
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Tags: phrases, phrase, sole proprietor, business activity, ambit, clauses, taj mahal, schedule c, federal tax return, constitution, levy