Is there some kind of sales tax or reporting tax deal that the government allows for foreigners that migrate here and start their own business? I don't exactly know how to ask this question, so I'll just give an example.

There's a Vietnamese couple that has a used furniture store down the street from me and they get plenty business daily. Problem is, they don't charge sales tax and they just jam the money in their pockets. They don't give receipts unless someone ask and then they just use pen and store bought receipts. When I questioned someone about all this money that Uncle Sam didn't know they were getting, I was told that the gov allows these breaks for foreigners that start businesses over here.

Anyone know if this is true? Seems strange since we are supposed to report every penny we make.

While I do not know specific laws about this, I would be shocked to find out that the government was giving them any tax break. Since it is a resale shop, their inventory is hard to track on paper. Either they don't know that they must pay sales tax, or they are underreporting their sales, in my opinion. However, it is certainly possible to run a business out of one's pocket and still know exactly how much you took in each day.

Thanks Dorian, and just for the record, I'm gonna do some checking about any kind of tax breaks. It could be something local/city. You're right that a business can be run out of one's pocket. It's just usually not the standard way unless you're hiding something (like dope dealers do) There seem to be so many Arabs taking over businesses here and I've been wondering why. I have no problem with them though because I like their products and they are so nice. They seem to appreciate people and are not uppity like some of these clowns around here.

There are no tax breaks for foriegn owned businesses.

I suppose the reason for the cash sales you mentioned is that they're not being tracked, and therefore not going into revenue records.

If they are trying to get away with avoiding an exise tax (or income tax), a single phone call can put them out of business.

honi, bunkboy is surely right. It's a cash business with limited documentation and that's the way the proprietors like it . Once they come to the notice of the local revenue authority, they'll receive a visit and their bookkeeping will improve . I expect that, as in Europe, the authorities have a power to assess tax unpaid. If the methods of the authorities in Britain and France are anything to go by, the 'assessment' is very generous to the authorities, enforceable in full immediately as a debt and no rebate or recalculation is made unless and until the business produces full and satisfactory accounts. There are often penalties and interest in addition to the assessed sum, too.

So one 'phone call from you to the local revenue body should do the trick. That's the right thing to do, because this business is in unfair competition with law-abiding businesses and increasing the tax burden, by however little, on the rest of the taxpayers.

It is quite likely that Uncle Sam does, in some circumstances, give tax breaks to people setting up businesses. He may do so to encourage the revival of old industrial areas where the local industry has died out or to create new employment in some region. He may do so to encourage foreign investment by corporations,with, or more likely without, specifically subsidising them because they are foreign. (That's how the European Union, and before it Britain alone, has operated and explains why of our old coal and steel areas are populated by Japanese carmakers and American computer firms )

Somehow I don't think a Vietnamese couple with a second-hand business would meet any such criteria .