Is it legal to "tax" a tax?

Question

We pay a school tax with our electric bill, it gets added to the total bill and then taxed again, is that legal? Isn't that double taxing?

Answer 1

For utilities, this is common. I work in the telecom industry and it happens regularly at every level.

It is generally held in my industry that a government mandated "surcharge" (a tax by another name) is assessed against the carrier but may, as an additional charge, be passed on to the consumer. If it is, however, that charge becomes part of the gross proceeds of the transaction and therefore subject to other taxes.

The best example of this is the federal universal service fun surcharge which is assessed against phone companies based on long distance charges. If the carrier elects to pass it on to the consumer, it is subject to other taxes and ironically also becomes part of the basis for determining the amount subject to federal universal service fund charges. In other words, it becomes taxable to itself!

Answer 2

Unfortunately it is legal and used all the time.

Do you pay sales tax on gasoline for instance? If so you are also paying tax on the total sale price including the Federal Excise Tax as well as any State or Local Government excise tax.

Be prepared for a breath tax, I'm sure someone is working on it.

Answer 3

If the government does it, and we have such things happen in New York all the time, that makes it legal unless you take them to court. Your best bet, although it probably won't change anything, is to compain to a state representative and write an editorial, maybe call a talk radio show. The politicians know it is being done but they count on us to either not notice or not bother doing anything about it.

Answer 4

Yep. The best example; you pay federal income tax on your federal income tax. There is no deduction on the federal return for the income tax you pay, so you pay on it twice. It happens all over with taxes, and there seems to be a myth that you don't.

Answer 5

no its not, the government does that alot, just recently they took off a 3% a tax on your phone bill(cell phone also) that was made to help a small war in 1906. the war cost 10 million and the government took 9billion dollers in the tax that the put on.

Answer 6

I don't know if its legal. You know the government has everything rigged up to best benefit themselves. But it shouldn't be legal if it is because you shouldn't have to pay tax on tax, tax is tax!!!

Answer 7

Technically, when you file your federal & state tax returns, I believe you can take a deduction for any taxes you were assessed on taxes, but it's rarely done because the extra paperwork might save you $4.00 and take you an hour!

Answer 8

hmm it is
but it's bit different
as u yes it on both places so u have to pay it

Answer 9

life babe


you pay again when you die as well