Many of you have read the book I presented in 1999 titled, THE STATE OF TEXAS is a LIAR!! so you are at least somewhat familiar with my chapter on the Texas Sales Tax.
When I first wrote the book, I really thought that the Sales Tax was only about 80% fraud. Now, after having studied the subject thoroughly, I conclude that it is nearly 100% fraud! In fact, you can't get much more fraudulent than the Texas Sales Tax!
The #1 problem with the Texas Sales Tax as it is administered is the fact that natural persons cannot be forced to collect a tax for the government under any circumstances! The Thirteenth Amendment to the US Constitution forbids a natural person from becoming an indentured servant unless convicted of a crime. Any natural person citizen has a common law right within Texas to open a business and sell things or perform services without being required to act as a tax collector for any government entity. This is an undeniable right which cannot be altered by any governmental entity without common law due process.
Also, the Texas Constitution does not authorize a sales, excise and use tax; therefore the Texas Constitution forbids such a tax! This same document, however, authorizes an occupation tax on natural persons or corporations doing business in this state. The important fact about this is the underlined term "doing business". Since the 1880's, this phrase has only referred to a foreign corporation and never has it referred to a natural person citizen of Texas! That's the fact!
So in 1961 when the Texas Legislature "enacted" the sales, excise and use tax, that tax only applies in Federal areas within the "exterior limits of Texas." That's right! This sales, excise and use tax since its inception has only applied within areas owned by the Federal government!
What a rip off! We have been lied to for 40 years by the government officials of Texas! Not only that, but the Municipal sales, excise and use tax also only applies to Federal areas! That means we've been ripped by both the State of Texas, and each City that has a sales tax! Does any of this information make you mad?!
So, to those of you who purchased and/or read my book, please forgive me, because I failed to research the subject as well as I should have before writing that chapter. I feel terrible that I had not seen it before, so now I want to lead this off with this apology. Admittedly, that Sales Tax chapter was not a good one.
Even still, I would encourage you to read or re-read it as it appears in the book. At least parts of that chapter will be helpful so you're on your own. But now you have a better chapter, or at least I hope you agree with me that it's better, and after much grueling research, I have finally exposed the vicious fraud that is the Texas Sales Tax, as well as other sales taxes in the other 49 states. In simple terms, "There is no such thing as a SALES TAX in Texas!"
What follows in this missive is what almost all individual business owners have desired to understand for decades, but which has never been put it into simple terms. Until now, that is. This subject is so simple to understand, that I am still kicking myself daily for not having taken the time needed to totally comprehend it prior to the publication of my book. Now that I understand it, there are a lot of people in deep doo-doo, and that list includes, but is not limited to business owners, city government officials, mass-transit officials, and the Texas Comptroller's "employees."
Now it is my fervent hope that all who read this updated chapter can totally understand the subject and be able to take the information and shove it down the legal throats of all those who work for government who are intellectually and morally challenged - a category which, if you were to ask my opinion, would include almost everyone who works for government. But, I digress.
If you want the proof for the preceding statements, please continue to read the following pages. They contain all the proof you need to see the entire scam!~~~~~~~~~I would have to say that the most important point to understand about any sales tax collection in any state is the fact that the Thirteenth amendment to the Constitution for the United States of America forbids anyone from being an "indentured servant":
"Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
Based on this statement, it was my first contention back in the late 1980's, when I first started seriously studying the Constitutions, both federal and state - that a human business owner [a natural person] cannot be forced to collect a tax. A simple little ditty I came up with back then sums up this subject quite well: "If the government didn't make you, then they can't make you!" In other words, if you were created by yo' mama and daddy, then the government can't make you do much of anything.
One other rather obvious "law" (which of course the comptroller's office seems to overlook) is found in the Texas Tax Code at 111.002:
(a) The comptroller may adopt rules that do not conflict with the laws of this state or the Constitution of this state or the United States for the enforcement of the provisions of this title and the collection of taxes and other revenues under this title. In addition to the discretion to adopt, repeal, or amend such rules permitted under the Constitution and laws of this state and under the common law, the comptroller may adopt, repeal, or amend such rules to reflect changes in the power of this state to collect taxes and enforce the provisions of this title due to changes in the Constitution or laws of the United States and judicial interpretations thereof.
What do we find here? You mean the comptroller's minions have to recognize people's rights which are guaranteed by the Constitutions? Bummer for the comptroller, huh? He can't just go walking into any business' office and demand to look at the books, [as they did to me back in 1996] now, can they? Didn't you find the reference to the "common law" very interesting? Maybe someone can tell me where is the common law allowing government to look at an individual's books and records without a warrant?
What does that tell us? It tells us that the comptroller's authority is in dealing with corporations. To know that, all we have to do is go to Section 111.004 Power to Examine Records and Persons:
(a) For the purpose of carrying out the terms of this title the comptroller may examine at the principle or any other office in the United States of any person, firm, agent, or corporation permitted to do business in this state, all books, records and papers and also any of their officers or employees under oath.
(b) If any person refuses to permit an examination or answer any question authorized by Subsection (a) of this section, the comptroller may certify the fact of the refusal to the secretary of state, who shall immediately forfeit the charter or the permit to do business of the person until the examination as required is completed.
If you need a bit more evidence that the comptroller only has authority over corporations and not individuals, just go to the MULTISTATE TAX COMPACT in Chapter 141 of the Texas Tax Code under Article II. DEFINITIONS:
3. "Taxpayer" means any corporation, partnership, firm, association, governmental unit or agency or person acting as a business entity in more than one state.
Can anyone name for me one business that operates in more than one state which is not a corporation-an entity created by the government? No? Maybe there is one near the borders of Oklahoma, Louisiana, New Mexico, or Arkansas that has an office in one state and another office just across the border in Texas, but probably not very many businesses do that without the limited liability which a corporation provides.
One other point that reaffirms the concept that the comptroller's office is required to abide by the Constitutions and "laws" of this state and the United States, is found at Section 151.307, which by the way, is somewhere near the middle of this Act. Its location indicates to me that an attempt to obscure the truth about this tax has been achieved intentionally, yet the Act maintains its Constitutional muster required by courts. [Incidentally, it's not the Acts of the Leg. that cause most of the problem. The Acts may read correctly, but the administration of the Acts is far from how they read, which is the case with our present subject.] Having studied thousands of Acts of the Legislature, I am quite confident that the Leg. looks for every opportunity it can find to give its agents an "out" when it comes to the administration of these Acts.
By using the term "out", I am referring to a way for agents of the State of Texas to be able to "bail out" and say, "Oh, we didn't know that the law only applied to this area or to that group of people, and didn't refer to this area or to this group of people." I truly think that is the reason the comptroller's office left me alone when I got into their face about how the law they cited didn't apply to me, but did apply to foreign corporations. They then "cut and ran" from a fight with me, because I had discovered an "out" for them. But even after I had proved it to them, they then sent someone from the Waco office to bother me, so it is obvious they don't listen to facts.
In this instance, Section 151.307 is the "out" that the Leg. gave to those who administer the "laws" of this state. It says:
(a) Tangible personal property or service that this state is prohibited from taxing by the law of the United States, the United States Constitution, or the Constitution of Texas is exempted from the taxes imposed by this chapter.
Do you see it? Does the common law - which is mentioned, if not commanded in these Constitutions - allow me to sell something I own? Yes? No? Maybe? Absolutely!! So, wouldn't you agree that this section also forbids the requiring of an individual to collect a sales tax? I say, without a doubt it does so!
So far, how many times did we see that the comptroller's office only has certain authority to do certain things? Several, wouldn't you say? So, why is it that nobody in the Texas comptroller's office is able to figure this out? Why is it that this office of the lying State of Texas continues to harass individual business owners, when all along the laws have not said what the State maintains they say?
The above quoted section of the Texas Tax Code is very similar if not exactly like what I found in almost every other state's tax code. It seemed that each state legislature gave an "out" to its executive branch, also, and this is how I believe each state can be attacked by citizen business owners in each of the other states. Look at the tax code and find the section that requires that the interpretation of the tax code line up with the constitutions of the US and of the state. It's rather simple. When you find it, you got'em!
The second most important fact to understand about the Texas Sales Tax is that the Texas Constitution does not authorize a sales tax. Since that document does not authorize such a tax, therefore it forbids such a tax. Now, some of you may think this to be a stretch, but if you do, then I would have to say that you have not done very much research into how law writers write laws.
Laws are written quite specifically. Unless they are attempting to deceive you, that is. [Unfortunately, this status is quite common, and highly likely, when it comes to Texas "laws."] In this instance, the interpretation has to be one of exclusion due to the history of Constitutions. These documents spell out exactly what government entities can and cannot do. [But, in reality, what government entity ever let a simple document get in its way of doing whatever it wanted to do?]
You'll find the only types of taxes that can be collected or administered in Texas with regard to natural persons are listed in Article 8, Section 1, of your copy of The Texas Constitution. [http://tlo2.tlc.state.tx.us/statutes/statutes.html] "Section 1-a" is also used in the Constitution to comment on taxes, but since that section is only important in regard to ad valorem taxes by state government and its political subdivisions, for our study here it is not important.
Our concentration on the sales tax must stick with Section 1 of Article 8, since that is what authorizes the different taxes. Probably the most important point to notice about this section is that a sales tax is not authorized at all. An income tax is authorized, but none of us pays an income tax, so why is it that the term, income tax, even appears in our state constitution? Everyone thinks we have a sales tax, but the term does not appear anywhere in the Article on taxation, while income tax appears and we don't even have one for natural persons.
In fact, that term does not exist in the Texas Constitution at all. What's up with that? What's up is that we have a major policy of FRAUD perpetrated by the state government and its political subdivisions. They have taken a formerly wonderful document - The Texas Constitution - and twisted the words to make it seem as if one thing is something else entirely.
We find in this Section 1 a term that is paramount to understanding this subject of sales tax. That term is occupation tax.
Section 1 (c)-"The Legislature may provide for the taxation of intangible property and may also impose occupation taxes, both upon natural persons and upon corporations, other than municipal, doing any business in this State. Subject to the restrictions of Section 24 of this article, it may also tax incomes of both natural persons and corporations other than municipal. Persons engaged in mechanical and agricultural pursuits shall never be required to pay an occupation tax."
As I stated in my book, occupation taxes have been around for more than 100 years. Since the very beginning in the 1880's, the occupation tax has only applied to foreign corporations and sometimes to itinerant peddler/salesman type natural persons. The word structure revealing to whom it applies has never changed. And the way the term is used above in Subsection (c) specifically designates that any occupation tax must apply to a foreign corporation because the term "doing (any) business" is used along with the term occupation tax.
When we go to Black's Law Dictionary, 6th Edition we find that it always refers to a foreign corporation. "…A foreign corporation is "doing business", making it amenable to process within [a] state, if it does business therein in such a manner as to warrant the inference that it is present there…." My 1914 edition of Bouvier's Law Dictionary says, DOING BUSINESS, see foreign corporation. Quite succinct, huh?
I became seriously interested in such language when the Texas comptroller's office investigated me for not collecting a sales tax. Having sent to me a copy of the "law," they provided me with an avenue to the truth. In my research of that "law" I kept coming across the term doing business. Believing that term must have some significance, I looked it up in the law dictionaries mentioned above, and found that the term only refers to foreign corporations and never refers to anyone else. The truth is, it doesn't even refer to domestic corporations. [To distinguish the difference between the two terms, note that a domestic corporation is one that is incorporated by the State of Texas, or whatever state is the subject of the law in question.]
This is an AMAZING piece of the sales tax puzzle, because in Texas, even a domestic corporation - one incorporated by the State of Texas-is not subject to an occupation tax. The State can force an entity it created to do whatever it wants that entity to do; even so, the State failed to force domestic corporations to pay an occupation tax! Admittedly, some of the domestic corporations are required to pay a gross receipts tax, but few of them - possibly only insurance companies, from what I have quickly pieced together - are required to do even that.
The picture of the sales tax fraud dawns, does it not? What has been masqueraded as a sales tax is actually an occupation tax to be paid by foreign corporations and possibly by itinerant foreign natural persons. I add this last category because government has a right to regulate the activities of "foreigners" from other nations, but it does not have the right to regulate "foreigners" from other states, as these visitors have the same rights and privileges in any state of the union. I know that is not a direct quote from the US Constitution; nonetheless, it is why natural persons from other states cannot be forced to collect a sales tax if they conduct a business in Texas. These particular natural persons, just like Texas natural persons, cannot be forced to be indentured servants, therefore negating the possibility that the state can force them to collect a tax.
[Now a really sharp reader may suggest that the above mentioned section of the Texas Constitution does allow for a sales tax in the first line of that section, "The Legislature may provide for the taxation of intangible property and may also impose…" So, what we have to do is find out if or when the Leg. "provide(d) for the taxation of intangible property." Again, this section of the Texas Constitution must pass muster with the US Constitution so that any provision by the Leg. probably will only apply to corporations since we all have a right to sell things (intangible property) we own. And we will find out later that the Leg. did provide for the taxation of intangibles, only it's not the way we have been lead to believe that it was accomplished.]
Back to our discussion-For instance, a natural person from Arkansas who owns a business in Texas cannot be forced to collect a sales tax or be forced to pay an occupation tax, according to what we have just read in the law dictionaries' definitions of the term doing business. The Arkansan is not a foreigner or a foreign corporation, so is able to conduct almost any business the individual wants to engage in without the restraint of collecting or paying taxes to the State of Texas.
A natural person from Mexico, who comes across the border into Brownsville and sets up a business to sell items to Texans, can probably be required to pay an occupation tax. However, since the Constitution uses the term natural persons it is still my opinion, due to the law dictionaries' definitions of doing business that the occupation tax still only applies to corporations.
But foreigners, as the laws read today, have no right to function in this state without permission from some governmental entity - whether the US or the State of Texas - much less the right to conduct business while here. Such would be the case if we were to go to another country to visit or conduct business. We would have to get some type of permission to do so. [Admittedly, I have very little knowledge of immigration or customs law so don't hold my feet to the fire in this section. What I do have is an uneducated opinion about these types of laws. Also, I'm not arguing here whether these laws are good or bad, I am just giving my interpretation of what I have observed over the years traveling occasionally to Mexico.]
Thus far, we've seen the problem the government has in its attempt to collect more tax money. It cannot force its natural persons to collect a tax; therefore the government must rely on entities it creates to pay/collect taxes. But now a new problem arises: foreign corporations will have trouble competing with the mom & pop stores because mom & pop don't have to pay/collect a sales tax, but the foreign corporation has to at least pay an occupation tax.
Now, if you were a foreign corporation, how would you get around this problem? Wouldn't you spend an enormous amount of money to lobby the Texas Leg. to change the law, or at least make it seem as if the law had changed? [The Texas Leg. is very good at this response, but I think that group took lessons from the US Congress. And that, to my mind, is what transpired in 1961, when the Texas Leg. allegedly enacted a "law" which supposedly instituted a "LIMITED SALES, EXCISE AND USE TAX." ]
Since this Act was passed during a Called Session rather than a Regular Session of the Legislature, it follows in the fine Legislative tradition that was begun by the US Congress. That tradition is this: whenever controversial or unconstitutional legislation needs to be passed, do it when almost nobody is looking. After all, who pays attention to legislation passed in a Special Session of the Texas Leg.?
When you read through this tax act, you will see all the way through it that it only applies to foreign corporations since it refers to a permit to transact business. This term, like the term doing business, goes all the way back to the 1880's and only refers to a foreign corporation. If you were to ask representatives of the comptroller's office what constitutes a permit to do business in this state, as I did on one occasion, they will answer that the simple little "certificate" on the wall of most retail establishments is the permit to do business in this state. Nothing could be further from the truth, because the permit referred to in the statute, is the permit issued by the Secretary of State, not the "permit" issued by the comptroller's office.
The "permit" issued by the comptroller's office is a fraud! It is an intentional deception to make business owners believe that they are required to collect a tax that doesn't exist.
If you look closely at one of these "permits" or "certificates" which is posted in most small businesses, you will read at the bottom of that piece of paper something to the effect that "The holder of this "permit" may be required to collect a tax." It does not say that the holder is required to collect a tax! Sounds a bit deceptive to me!
For more proof that the term permitted to do business in this state only refers to a foreign corporation, go to Article 12.09 on page 110 of Chapter 24 of the 57th Legislature, 1st Called Session. You will see the following quote:
"Where a domestic corporation is chartered in this State or where a foreign corporation which has heretofore done no business in this State, and is granted a permit to do business in Texas…"
If the permit to do business in this State referred to domestic corporations also, don't you think they would have said so and just lumped the two categories together? That would have been simpler, don't you think? But the terms are different because it has always been the intention of the Leg. for domestic and foreign corporations to be treated differently. [It is my opinion that if we are going to allow corporations or other limited-liability organizations to exist, then I don't have a problem treating foreign corporations a bit differently than domestic corporations.]
Now, here's something that just might flip your lid! It appears that this LIMITED SALES, EXCISE AND USE TAX applies to US Government owned property only. But since this entire Act was designed to confuse and deceive business owners and consumers into believing that the State of Texas had a right to force business owners to collect a sales, excise, and use tax, we can expect more surprises. After all, one more bit of chicanery would be no big deal when taking into consideration the magnitude of the fraud already attempted with this Act of the Leg.
How can the sales and use tax apply only to property owned by the US Government? It comes from the applicability section of this original sales, excise and use tax act, where, as many of you will recognize, the writers of this Act use the deceptive legal term, includes. This quote is found in the definition section of this Chapter:
"(E) In this State or Within the State, "In this State" or "Within the State" means within the exterior limits of the State of Texas and includes all territory within these limits owned by or ceded to the United States of America."
If you haven't yet read my book, some of you may not understand my reference here to the importance of the term includes, but it is extremely important when reading laws. As stated earlier, laws are written specifically and the term includes is used by these law writers to refer to the exact place, thing, or entity referred to. When they use the term includes, it excludes everything not listed. As an example of this type of writing we can look for uses of the terms also includes, or including, but not limited to. [See p.2] These specifically used common terms make me conclude that the use of the terms include, includes, including are almost always exclusionary when read in "law books."
This style of legal writing follows the "doctrine" of inclusio unius est exclusio alterius. You will find this term defined in Black's Law Dictionary, 6th Edition, page 763 -
"The inclusion of one is the exclusion of another…This doctrine decrees that where law expressly describes particular situation to which it shall apply, an irrefutable inference must be drawn that what is omitted or excluded was intended to be omitted or excluded."
The "doctrine" is one of the most important points to understand before you will ever gain insight as to how to read laws of all kinds, and it is one of the main contentions that I and other researchers have with lawyers, prosecutors, and judges. This problem is exacerbated by the fact that few of the members of these groups actually ever read any laws! I know that sounds crazy, but it is very true. And I say that, not just from my own experience with these types, but after many conversations with other researchers who have made the same type of comment.
As a general rule, the legal "experts" don't know what the laws say! They are seldom forced to go read a law, much less the history of a law, as I have done on countless occasions and as I have with this subject. So, because we researchers actually read the laws, we see patterns emerge in the writing of laws. Learn the patterns, and it's rather easy to understand what laws mean - usually, anyway. [I'm still scratching my head on some of these statutes! Sometimes I get to wondering how so many words could be strung together, yet mean nothing to a semi-intelligent man.]
And as these patterns go, the use of the words include, includes, including is one of the most important to understand. Before someone taught me this particular simple pattern several years ago, I had thought myself rather intelligent. What a wake-up call and humbling experience that was! Within a short time, I realized that when it came to reading laws, I had been minor league, if not little league. After learning the include, includes, including pattern, I was convinced it is one of vital importance.
For me to prove each use of the word include, includes, including as exclusive rather than inclusive would be pretty difficult. The best suggestion I can use to demonstrate my interpretation of how "they" write laws over a long period of time is to follow the history of a "law" and watch its progression. The best example of this process is my chapter on the Motor Fuels Tax.
The best proof can be found in Black's Law Dictionary 4th Edition, where it defines the word, include.
"To confine within, hold as in an (i)nclosure, take in, attain, shut up, contain, (i)nclose, comprise, comprehend, embrace, involve…"
Now, someone want to argue with me about the use of the word includes?
All that aside, let me give you some additional facts to prove that the applicability of this Sales Tax Act was for US Government property. It all may go back to the Buck Act of 1940 [54 Stat. 1059, see at 4 USC 105-110]. This was the Federal act that allegedly gave authority for the Federales to collect an income tax from State government employees, and each State was "allegedly" allowed to collect a State income tax from Federal employees [4 USC 106]. However, Texas didn't have an income tax that could be applied to Federal employees. Something had to be done so that the State of Texas could get something from the Federal employees, or else it was just the State government employees getting the screws put to them, having to pay the Federal income tax.
Part of this Buck Act, in section 105, allegedly allowed a State to impose a sales, excise and use tax in Federal areas, or at least that's the way it could have been interpreted by State officials. [That's because almost no State official has ever figured out how to read the definition sections of the US Code, specifically this Buck Act.] I say that the Texas act was enacted as an "I'll scratch your back, you scratch mine." maneuver, because the Federales had already passed a similar act, which said the same basic thing back in 1940. Let's look at what it says at 4 USC 105.
(a) No person shall be relieved from liability for payment of, collection of, or accounting for any sales or use tax levied by any State, or by any duly constituted taxing authority therein, having jurisdiction to levy such a tax is levied, occurred in whole or in part within a Federal area within such State to the same extent and with the same effect as though such area was not a Federal area.
(b) The provisions of subsection (a) shall be applicable only with respect to sales or purchases made, receipts from sales received, or storage or use occurring, after December 31, 1940.
Here we see that the Federales had allowed the States to "levy" a sales, excise and use tax a long time before the Texas Leg. got around to actually enacting such a tax. But the tax could not be collected by Texas in Federal areas without actual Legislation by the State.
Just because the Feds say they will allow a tax to be collected in areas it owns, that Federal legislation alone in no way allows any State to collect the tax without that State enacting a law that says it is, from this date forward, actually collecting the same type of tax. But, as we are able to see, the Texas Legislature never got around to enacting such a "law" until 1961, a full 21 years after the Feds said, "Hey, you guys in Texas! You may now collect a sales, excise and use tax in any areas we own!" The Texas Leg. sure did take their time getting an act passed, now didn't they?
So, now what do you think about that sales, excise and use tax imposed in Texas? You want to convince me that the whole act didn't apply to just Federal areas? How long you think that is going to take you? Some of us can read, and when we read the same basic thing in a Federal "law" as we read in a State "law," we tend to see the real picture that is painted by those "laws."
Why could this Act only apply to Federal areas? Because it was the only way that such an act could be Constitutional! Remember, the Texas Constitution did not authorize a sales, excise and use tax, so to escape the wrath of an honest court - which from my viewpoint is rather easy, since I have yet to find an honest court in Texas - the Act could only apply to Federal areas! It would have been un-Constitutional for the act to apply to the citizens, business owners, domestic corporations of Texas or, for that matter, even foreign corporations, or just foreign natural persons. Remember, the Texas Constitution only allows for an occupation tax, ad valorem tax, and an income tax. Since the sales, excise and use tax could not pass muster constitutionally, then the Leg. had to make sure it passed muster somehow, and they did that by making the Act apply to Federal areas, just as the Federal "law" allowed. Simple, huh?
Sadly, this sales, excise and use tax was then used by the State government to force business owners to collect the tax all over the state, when all along it was only written as a way to collect money from the Federales.
Now some of you would suggest that I go search out the House and Senate Journal written during this period to see if my theory is correct. But to be honest with you, when I've done that in the past - when attempting to understand the difference between an automobile and a motor vehicle - what I found was that those legislators who had not actually written them didn't have much of a clue as to what the laws actually said. My thought was that they were as deceived as much as the rest of us are about most "laws."
If you want an example or two of what legislators don't know, just look at the Texas "Robin Hood Plan" for financing public schools, the Federal Income Tax, and the fact that the Federal government is limited by law to operate only within the Seat of Government - Washington, D.C. [4 USC]. We see Federales almost every time we turn around, and nobody has yet met the employee of the State of Texas - or any one of its political subdivisions - who has ever understood that principle.
Let's just suppose that the "law writer" of the original Sales, Excise and Use Tax Act made an error and forgot to include all of Texas within the applicability section of the Act. Isn't it probable that later "law writers" would have corrected this mistake? [ But, for a change in the law, the Leg. would have had to "enact" a new law written correctly, wouldn't they?]
Just for fun, go to chapter 151 of the Texas Tax Code on the Internet and see if subsequent "law writers" covered the earlier "mistakes". Here's what you'll find at 151.004:
"In this state" means within the exterior limits of Texas and includes all territory within these limits ceded to or owned by the United States."
WHOA, NELLIE!! What do we find here?! Anyone want to tell me that something about this "applicability" has changed in 40 years? Anyone? Is this deception, or what?
If you want more proof to be able to trust my position on this issue, let me inform you of what I found while looking at the Tax Codes of most of the other 49 states. I did this kind of just to have something to do while the wife was away in Italy. On just on a wild hair, I thought I'd see what the most populous states had in their Tax Code about sales tax. [Hey! While the wife's away, some men have affairs; some men study Tax Codes!]
And study Tax Codes I did, and what I found was that no less than 15 other states have the exact same wording, or very similar wording in regards to the applicability of the sales and/or use tax within that state. Most all of these are quoted exactly as the Texas statute-except the name of the state, of course. Virginia was exactly the same except for the use of the word Commonwealth in place of state. Wisconsin left out the phase about land owned by or ceded to the US. Florida was the easiest to find-those Floridians maybe aren't as deceptive as other legislators? Even the Yankees in Maine and Connecticut have a statute that reads just like Texas. [Think when they hear about that, they make a change?] The state of Washington changed the wording a bit, but it meant the same. Joining these states are North Dakota, South Carolina, Rhode Island, Idaho, Kentucky, California, 'Bama, and Nevada. And can you believe that the Leftists in Vermont have a statute that reads just like the one that the conservative state of Texas has?
Of course, the wise guys in Michigan had to do something that would set them apart from those of the lower class states by changing the wording in such a way that almost sounded intelligent: " 'In this state' means the area within the borders of this state, including all territories within the borders owned by, held in trust by, or added to the United States of America." [Do you think those Michiganders know something about the US of A, as opposed to the US, that we do not know?]
But, the state that "takes the cake" for obfuscation has to be UTAH. At 59-12-103.1 you'll find possibly the most ridiculously worded statute you'll ever read! I would recommend that you go to that state's web site and check out this chapter. They take a whole chapter to do what the simple sentence in other states' statutes say. After reading it, I decided rather quickly that Mormons couldn't be in control of the Utah Leg. Either that, or Mormons aren't as honest as I had been led to believe. That chapter is a fraud to the MAX! But, that's just the opinion of a home inspector, and what do I know?
What I decided after looking at almost all of the other states is that the pattern is clear. The 50 states are in cahoots with the federales in deceiving their citizens about the sales and use tax which is collected in almost every state. What I found is that even if the state's statute didn't have an applicability section as does Texas, the rest of the Tax Code section on a similar tax as the Texas Sales and Use Tax contained very similar wording as does the rest of Texas Tax Code for similar taxes. You are welcome to check all of them out for yourself, and I am quite positive that you'll agree with me on the wording.
Now that we know what in this state means, we can have more fun. Let's look at a few of the references to in this state as it is used in the Texas Tax Code today, and see if a pattern develops?
151.0104 "For the purposes of this chapter, 'telephone company' means a person that owns or operates a telephone line or telephone in this state and charges for its use."
151.011(b)-"With respect to a taxable service, 'use' means the derivation in this state of direct or indirect benefit from the service."
151.011(d)-Except as provided by Subsection (e) of this section, 'storage' means the keeping or retaining for any purpose in this state of tangible personal property sold by a retailer."
151.025(a)-"All sellers and all other persons storing, using, or consuming in this state a taxable item purchased from a retailer shall keep records, receipts, invoices, and other pertinent papers in the form that the comptroller reasonably requires." [EXCUSE ME?!! Do you mean to tell me that if I, a consumer, purchase something from a retailer that I have to "keep records, receipts, invoices, and other pertinent papers in the form that the comptroller reasonably requires."? [Do you think maybe the term "consumer" doesn't mean what we think it means?]
151.051(a)-A tax is imposed on each sale of a taxable item in this state." [This is where the actual tax is imposed, and it obviously applies to the areas within Texas that are defined in this Act as "in this state." Any questions about where that is?]
151.052(b)-"…if the person delivers the property to a consumer in this state or to another person for redelivery to a consumer in this state under a sale of the property that is not a sale for resale, and that is made by a seller not engaged in business in this state." [Foreign Corporation?]
151.101(a)-A tax is imposed on the storage, use, or other consumption in this state of a taxable item purchased from a retailer for storage, use, or other consumption in this state."
151.102(a)-"The person storing, using, consuming a taxable item in this state is liable for the tax imposed by Section 151.101 of this code, and except as provided by Subsection (b) of this section, the liability continues until the tax is paid to the state."
151.102(b)-A person storing, using, or consuming a taxable item in this state is not further liable for the tax imposed by Section 151.101 of this code if the person pays the tax to a retailer engaged in business in this state or other person authorized by the comptroller to collect the tax and receives from the retailer or other person a purchaser's receipt as given as provided in Section 151.103 of this code."
151.103(a)-A retailer engaged in business in this state who makes a sale of a taxable item for storage, use, or consumption in this state shall collect the use tax that is due from the purchaser and give the purchaser a receipt for the tax payment…"
151.104(a)-"A sale of a taxable item by a person for delivery in this state is presumed to be a sale for storage, use, or consumption in this state unless a resale or exemption certificate is accepted by the seller."
151.105(a)-Tangible personal property that is shipped or brought into this state by the purchaser is presumed, in the absence of evidence to the contrary, to have been purchased from a retailer for storage, use, or consumption in this state." [What's this? Guilty until you prove your innocence? Does this apply to a natural person or artificial person?]
151.105(b)-"A taxable service used in this state is presumed, in the absence of evidence to the contrary, to have been purchased from a retailer for use in this state.
151.106. Registration of Retailers"...
Wait! Before we go on, there is one very important point that we must dissect in this idea of registering with the Texas comptroller's office. A human being/natural person has no responsibility to register with anyone so far as I can see, mainly because the common law, which is still in force in Texas, allows each person to open a business if the individual wants to do so. Where does registration come in under the common law? It doesn't. But under the law of Corporations, these entities have to register if the government says registration is required. A very simple principle, if you ask me.
So what about Retailer Registration? We may find the answer, if we can do a good job of ciphering what is written in 151.106 and 151.107, but that could be rather difficult due to the deception of the words used. If we analyze these two sections, we might actually learn something. Or, we may be just as much in the dark about it as we were before I wrote this. So, let's give it a try.
151.106. Registration of Retailers
(a)-"A retailer who sells a taxable item for storage, use, or consumption in this state shall register with the comptroller." [What does that little ditty tell us about who must register with the Texas comptroller's office? Honestly, not much. The only hint of a suggestion at a requirement to register comes in this subsection (a) with the use of the word "shall." But, as so many of us are aware, that word "shall" can be defined or interpreted as either a requirement or just a directive. Slight of hand, if you ask me.]
(b)-"The registration must include: [There's a "must", but does it "require" registration? Does it follow "must register" or "shall be required" to register?]
(1)-"the name and address of each agent of the retailer operating in this state;" [Aside from what the definition of in this state means, since when does an individual have to disclose to a government agent a name and address of someone who works for the individual? But, a corporation may have to.]
(2)-"the location of all distribution or sales houses or offices or other places of business in the state; and"
(3)-"other information that the comptroller requires."
(c)-"A retailer required to register under this section must comply with Subchapter G of this chapter." [I've yet to see where anyone is required to register. How about you?]
One thing I want to point out, as further ammunition for my point that the limited sales, excise and use tax was established to apply only in Federal areas, has to do with the redundancy used by the law writers or the members of the Texas Leg., as did all the other states with similar wording for this statute. They keep repeating over and over again the phrase "in this state" when it seems to me that there is no reason to restate the term, as everyone reading the section obviously knows what state the law is talking about. So, why the overuse of the term? Seems to me that the only reason is so that it is unmistakable that the term "in this state" only refers to a Federal area. Any business owner or attorney who reads the definitions of the terms used in this Act knows that it only applies to Federal areas and does not apply throughout the state. [Here is another fine example of how the Leg. gave the administrators of this "Law" an "out."]
The evidence of my theory on that one is contained in the next section, 151.107:
Retailer Engaged in Business in This State.
(a) For the purpose of this subchapter and in relation to the use tax, a retailer is engaged in business in this state if the retailer:
(1) maintains, occupies, or uses in this state permanently, temporarily, directly, or indirectly or through a subsidiary or agent by whatever name, an office, place of distribution, sales or sample room or place, warehouse, storage place, or any other place of business;
(2) has a representative, agent, salesman, canvasser, or solicitor, operating in this state under the authority of the retailer or its subsidiary for the purpose of selling or delivering or the taking of orders for a taxable item;
(3) derives rentals from a lease of tangible personal property situated in this state;
(4) engages in regular or systematic solicitation of sales of taxable items in this state by the distribution of catalogs, periodicals, advertising flyers, or other advertising, by means of print, radio, or television media, or by mail, telegraphy, telephone, computer data base, cable, optic, microwave, or other communication system for the purpose of effecting sales of taxable items;
(5) solicits orders for taxable items by mail or through other media and under federal law is subject to or permitted to be made subject to the jurisdiction of this state for purposes of collecting the taxes imposed by this chapter;
(6) has a franchisee or licensee operating under its trade name if the franchisee or licensee is required to collect the tax under this section; or
(7) otherwise does business in this state.
How many times did they repeat that term? Why would they do that, if the term doesn't have any significance? The truth is, it does have great significance, and they have bamboozled the entire state and several generations of Texans and visitors to this state.
We see by the #7 subsection above that the term is only referring to foreign corporations, as even in 1961, this "new" tax could not lawfully be forced upon business owners who do not operate as a corporation or some other government-created entity, even if that entity was in a Federal area. Why not? Simply because the Thirteenth Amendment was still in force. [At least, theoretically, it was and is still in force.] But with the weight of the State of Texas coming down on a business owner, most of them at that time probably found it easier to "switch than fight." It was easier to collect the tax, since it seemed small compared to the profits they anticipated, than to fight the wrath of the Texas Comptroller's office. Some of us, on the other hand, would rather "fight than switch."
A major problem people have when attempting to understand the acts of a Legislature or Congress, is that they fail to seek out the section on "applicability." These are very sneaky sections of many, if not most, legislative acts, mainly because quite often this section is hidden in the middle of the act. Sometimes in Federal "law" it may be way in the back of the act. [Those guys are really evil!] There is no doubt in my mind that the deception is on purpose so that people are totally confused as to whom the act applies. I can recognize the pattern because, as I said earlier, I've looked at thousands of Acts of the Texas Legislature and hundreds of so-called Acts of Congress. And the pattern is one of deception. If you don't understand that by now after having read the above evidence of deception, you are hopeless in my opinion. You are obviously deceived by people who are evil, or, I am not very good at getting my point across.
One of the ways this "new" sales tax was used deceptively is that instead of charging foreign corporations a license fee in lieu of the occupation tax, the State of Texas decided to force those entities which were responsible for paying the occupation tax for a flat fee, to now collect a "sales tax" which would be based on the "gross receipts" of "taxable items" sold by the business. But, the "law" was written in such a way that any Tom, Dick, Joe Bob, and Sue Ann business owner would think that he/she had to collect a sales tax. Smoke and mirrors? Not really, but close. They just used confusing terms, for which nobody in their right mind would ever go to find the definitions. Then again, they had never met me.
So, now that we have seen the deception perpetrated by the State of Texas since 1961, let's take a look at the sales, excise and use tax perpetrated by city, counties, and mass transit government bodies. This one will amaze you, I hope. [Or maybe I'm the only one weird enough to find this subject amazing?! Don't answer that! Just keep reading, please.]
We find the Municipal Sales and Use Tax Act starting at 321.001. One of the most important points to understand is what is found in Subsection (b) of the Definitions in 321.002 -
"Words used in this chapter and defined by Chapter 151 have the meanings assigned by Chapter 151."
So, what does that tell us about our suspect term in this state? It appears that even in the municipal sales tax act our suspect term has the same meaning, which means that even this sales tax applies only in Federal areas.
When reading through Article 8 [Taxation] of the Texas Constitution a person will find no references to a Sales, Excise and Use Tax, but we do find references to occupation taxes, even ones by counties, cities and towns:
Article 8, Section 1(f) The occupation tax levied by any county, city or town for any year on persons or corporations pursuing any profession or business, shall not exceed one half of the tax levied by the State for the same period on such profession or business.
Also, we find this restated in the Tax Code at 321.101 Occupation Taxes:
(a) The governing body of a municipality, other than a Type C general-law municipality having 200 or fewer inhabitants, may impose and collect occupation taxes.
(b) A license required by a Type A general-law municipality may not extend to more than one establishment or apply to more than one occupation, business, or calling and may not be imposed except by a vote of two-thirds of the elected aldermen.
One other section of the Tax Code puts a restriction on the Municipal Sales Tax and that is found at 101.008:
No city, county, or other political subdivision may levy an occupation tax imposed by this title unless specifically permitted to do so by state law.
And another restriction is found at 321.207:
(a)-The sales tax authorized by this chapter does not apply to the sale of a taxable item unless the sales tax imposed by Subchapter C, Chapter 151, also applies to the sale. [It would seem to me that this tells us the municipal tax only applies in Federal areas due to the fact that the State Tax only applies in a Federal area. Again, it's a simple principle.]
(b)-The excise tax authorized by this chapter on the use, storage, or consumption of a taxable item does not apply to the use, storage, or consumption of a taxable item unless the tax imposed by Subchapter D, Chapter 151, also applies to the use, storage, or consumption.
I don't mean to seem like a broken record, but another short section I found interesting is in Chapter 323. 002 - County Sales And Use Tax Act:
"The words used in this chapter and defined in Chapters 151 and 321 have the meanings assigned to Chapters 151 and 321."
So, it would appear that if a county wanted to impose this so-called sales and use tax, that tax would still only apply to the Federal areas because of the definition of our suspect term "in this state."
And while we are dickering with definitions, this next one I found extremely interesting because our suspect term "in this state" gets changed to the name of the municipality. How's that for trickery? This point is found at Subsection 321.205, where we find a very peculiar definition. [In fact, I almost missed it.]:
321.205. Use Tax: Municipality in Which Use Occurs
(a)-In determining the incidence of the use tax authorized by this chapter the name of the municipality adopting the tax is substituted in Subchapter D, Chapter 151, for "in this state" where those words are used to designate the taxing entity or delimit the tax imposed. However, the excise tax authorized by this chapter on the use, storage, or consumption of a taxable item does not apply if the item is first used, stored, or consumed in a municipality or area that has not adopted the taxes authorized by this chapter.
Seems to me that the municipality would be defined as a "Federal area" in certain sections of this Tax Code. That's the way I read it, anyway.
Now, let me give one more illustration in regard to our suspect term "in this state." I find the following to be an example of exposing the pattern used to confuse. See what you think of it.
151.323. Certain Telecommunications Services
There are exempted from the taxes imposed by this chapter the receipts from the sale, use, or other consumption in this state of:
(1) - long-distance telecommunications services that are not both originated from and billed to a telephone number or billing or service address within Texas;….
Do you see the duplicity in using the two different terms to describe the same place? Or, maybe they didn't want to describe the same place? And that is my contention, as you have been able to see. They did not want to use the name Texas, when it would have been just as easy to do so. They knew the tax wouldn't constitutionally fly if they used the term Texas, so instead they used the term in this state, hoping that people would just read into it, Texas, and they could then impose a tax, which was never intended by the Texas Constitution. And, we fell for it!
Would it warm your heart to know that the city you live in is authorized and instructed by statute to snitch on a person that is doing business within its city limits without a permit to do so? We find that at 321.302(c):
If a municipality determines that a person doing business in the municipality is not included in a comptroller's report, the municipality shall report to the comptroller the name and address of the person….
Actually, it's not such a bad idea, since you are now one of few people in the known free world who actually understands that the term doing business only applies to foreign corporations. It's a rather simple principle, wouldn't you say? Now, if these cities and the comptroller's minions just leave the rest of us business owners alone, we just may live happily ever after.
With all that said, where do we go from here? How do we get those who work for the government entities to admit that no such law exists that requires any business in Texas not in a Federal area, to collect a sales, excise or use tax? What I would advocate is to attack the business owner who charges you a sales, excise and/or use tax with lawsuits for fraud. My suggestion, if you are still listening, would be to inform that business owner of your intentions if that owner should charge you one of these taxes. Give the owner the option of not serving you - in that way the owner can avoid a lawsuit - or the owner can continue to charge you this fraudulent tax and suffer possible legal damages, both from a lawsuit and possible criminal charges for fraud.
Before I close this subject, I must mention another problem that natural person-business owners must face, and that is the fact that buying wholesale can be a problem at times. However, even this problem should not be insurmountable due to the fact that even wholesalers would have to adhere to the same rules/laws, as would a "retailer." If that wholesaler is a foreign corporation, then an occupation tax must be paid by that wholesaler. If the wholesaler is not a foreign corporation, or even a domestic corporation, then the occupation tax would not apply. Simple, huh? Also, the so-called sales tax, since no such animal exists, would not come into play, and that is a major bonus when it comes to buying wholesale for many business owners.
Let's face it. Fraud is FRAUD!! Only a person who refuses to deal with fraud will allow this state government to force business owners to continue as tax collectors. An honest person will desire that all business owners adhere to the laws as they are written, and in this case, that means only foreign corporations collect taxes for the State of Texas. And that also means that anyone who works for the State of Texas and one of its political subdivisions - read county, city, and any other government entity within the borders of Texas other than the Feds - is involved in a scam operation.
In concluding this subject at this time in early May, 2001, I would recommend to each one of us who understands this subject, to move aggressively and pointedly against this evil tax which has allowed government within our state borders to increase their power over us. We have been lied to BIG TIME!! And, I am of the opinion that the time is ripe to fight back with peaceful, determined efforts to bring this information to all parties within this state that can effect a change in the administration of the tax "laws."
Daniel Lee Schinzing
~~~ All rights are reserved except permission is granted to non-commercially copy, send, or in any other way to make use of this paper, so long as no changes are made, and credit is given the author. This is excepting when used for legal purposes in defense against or in mounting an offense aimed at evil-doers. In these situations please use as needed.~~~
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Notice: TGS HiddenMysteries and/or the donor of this material may or may not agree with all the data or conclusions of this data. It is presented here 'as is' for your benefit and research. Material for these pages are sent from around the world. If by chance there is a copyrighted article posted which the author does not want read, email the webmaster and it will be removed. If proper credit for authorship is not noted please email the webmaster for corrections to be posted.