20 States Collecting Internet Tax

Patik writes "According to this AP article, twenty states, including New York and California, are "requiring taxpayers to declare any tax they owe on out-of-state purchases," targetting Internet sales. New York expects this to bring them $2.5 million this year while California expects $13 million. Many are cynical about the new push, saying taxpayers will simply leave the line on the tax form blank, though the IRS says they will audit any offenders."

Comments

Re:Where do I pay the tax?

[Anonymous Coward]

massachusettes, your domicile.

Re:Where do I pay the tax?

[AKnightCowboy]

So if I live in Massachusetts, order something from Amazon, but have it delivered to my in-laws in New Jersey, who deliver it to my Uncle in Long Island for his birthday, which state is supposed to get the tax?

If these are the same as the Ohio Use Tax, then you pay the tax wherever the item will eventually reside, in your case Long Island. So for example, I buy a computer from California and have it delivered to Ohio I pay my Ohio county's sales tax rate as a "use tax". Actually, from what I understand of the law, if I buy a computer in an Ohio county that has a 6% tax rate and bring the item back to my county where I live where the tax rate is 8%, I owe the state 2% use tax. That's bullshit IMHO. It's entirely voluntary compliance though and Ohio has no authority to regulate interstate commerce so I'm not sure how they could ever hope to enforce this.

Re:Across state lines

[Detritus]

You might start here, it's a Supreme Court decision on sales tax and use tax. It has plenty of footnotes and references to earlier decisions.

My reading is that the Supreme Court allows use taxes as long as they do not penalize interstate commerce. Your use tax rate may not be higher than your sales tax rate.

Re:IRS says they will audit any offenders

[wronskyMan]

The IRS and state tax departments do have agreements to exchange data...