MA Requires Internet Tax for 2002 Tax Season

Flamesplash writes "Yahoo! is running this story about how Taxachusetts has added an "internet" tax to it's 2002 state forms, 'this year's income tax form will have a new line item -- asking you to estimate and pay the sales tax on items you've purchased from out of state.' It should be noted that 'the law has been on the books since 1967. But only car and boat owners registering their vehicles in Massachusetts paid.'"

Comments

"Use tax" -- very old news

[MacAndrew]

It's just a variation on sales tax, present in many states as a "use tax" and mostly affecting mail-order. Very rarely enforced, and a tremendous number of people must violate it out of ignorance. The only major enforcement exception I can think of is purchasing cars -- in the Chicago area, out-of-state car dealers advertise their lower tax rates, but when you come back to IL they tag you on registering it. Chicago sales tax is now around 8%?

More interesting (to me :) is why we tolerate sales tax at all. You get taxed coming -- income tax -- and going -- sales tax. In theory maybe a sale tax is an incentive to save, but I think it's just a way to disguise the total tax burden. Kudos to the states that skip it, although some (Oregon) appear to be going bankrupt and may have to reconsider. The other approach is the value-added tax popular in Europe, like a national sales tax. I don't know how well it works.