In article <65003526-56ae-49a8-beb4-29f79bf0f094[at]n33g2000pri.googlegroups.com> ,
Darryl <DarrylJ[at]yahoo.com> wrote:
- quote -

Was the Use Tax included on your 2007 return and added to the total
you owed? Say you owed $10,000 in Income Tax, $1,000 in Use Tax, and
paid $13,000. You get a refund of $2,000, which consists of $3,000
State Income Tax Refund (federally taxable), minus $1,000 Use Tax owed
and not previously collected (not federally deductible).

Seth

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

My 1099G from the state of MI listed, under REFUND, an amount $XXX.
However, amount $XXX is actually my state income tax refund for year
2007 (issued in 2008), plus the amount I paid in Use Tax for 2007 on
my 2007 state return.

The Michigan Use Tax is the amount that Michigan charges you for what
they GUESS you must have ordered on the Internet, and not paid sales
taxes on, based on your income.

However, how in the hell does MI figure that the use tax is a refund?
Cause refunds usually make me happy, and I'm not happy every year when
I pay their internet tax (*cough*excuse me, I meant "use tax").

At no point do I report to the Feds, anywhere, the use tax as part of
my state taxes paid on my 1040, so I'm not sure how use taxes enter
into it at all, much less as a "tax refund". It might be nice to
report the use tax as part of the state income taxes paid, but lumping
it into the "refund" portion of the 1099G pretty much rules that out.
Unless they're assuming I mistakenly reported it as state taxes paid,
and so they are going to kindly add it as part of my "refund" to
offset my "mistake" which I never made.

Can anyone explain Michigan's thinking on this? Their website just
says that they lump the use tax into the refund amount reported,
without explaining why.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >