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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."
It's only being made an issue due to the increased use of out of state mail order. That's what buying stuff over the net is. States have always required people to declare out of state purchases if the person declared at the time it was for delivery out of state.
My father's TV shop was 3 miles from a state line. He regularly had people come to buy TV and such to be delivered 'out of state' and so didn't have to pay him sales tax. They were supposed to declare it on their state tax form. Sure, few did. Sure, far more are doing this now. But it's nothing something new specifically aimed at the net.
"I may be synthetic, but I'm not stupid." -- Bishop 341-B
So the IRS is enfrocing state taxes now?
Someone needs to be bit more careful attributing quotes.
the IRS says they will audit any offenders.
I don't think the IRS will be involved. The IRS is for federal taxes. The state tax auditors (if there are any) will do the investigating. If you do get audited by the IRS. only show them your federal forms. Unless they have a need to know, your state forms are none of their business.
Unless the tax is collected at the point of sale, I don't see this working.
I mean, obviously hardly anyone keeps track of all that stuff. It's a huge pain in the ass. If it was collected at purchase time then it would be a whole lot more normal (you know, like when you buy stuff in-state).
If they want to really collect tax they need to find a way to make the seller responsible for collecting the taxes not they buyer to report them. So now what, all companies in CA who buy things from CDW or tigerdirect are suppose to report how much they bough on the internet and then report that to the IRS? That will create a tax nightmare. Good luck to them at auditing!
Only 'flamers' flame!
Does slashdot hate my posts?
It's no secret that most states are hurting when it comes to their most recent budgets. Taxing the internet sounds good on paper for most of these politicians, and in a lot of ways it's just another form of locaization.
When most people purchase, they do so with the expectation of delivery charges. Catalogs are similiar. Whatever you don't pay in state tax, you will normally pay for in shipping fees.
The "Use Tax" is absurd. If the states which wish to impose sales tax on internet purchases, it should only to ONLY the stae in which the company resides. This would make states compete for the business of such companies. States would soon learn it's far better to not charge end users, but directly tax these companies earnings their the income of their employees.
Yet another form of short term legislation, which can't see beyond the next hill.
Auditing the offenders wouldn't be so bad. There are only, what, 16 million people in the whole state? Probably half of those purchase online. 8 million audits wouldn't put too much of a strain on the system.
"I'll say it again for the logic-impaired." -- Larry Wall.
Why would the IRS audit my STATE tax returns?