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

not a bad move, maybe

[MacAndrew]

most all of us (er, not me) violate the "use tax" rules in our state with out-of-state purchases, except those in states without sales/use tax (lucky). but before you had to fill out a separate form and anyone would feel like a chump volunteering to pay a tax the state would have a heck of a time enforcing and none of their neighbors is paying.

putting it on the main form will at least get money from more people, not such bad thing, and if you're dishonest you should still appreeciate it because it will lower your taxes otherwise due. heck if it's in on the main form maybe i'll pay it just as, er, i've been paying it all along of the separate one.

if you have a problem with the collection of the tax, bear in mind your problem is with ALL sales taxes, not the "internet" flavor of some of those purchases. (hey i don't like them, i think they may inhibit commerce.) one way to ease the recordkeeping burden is to provide, say, a $1000 exemption so many people don'thave to think about it. and from a recordkeeping standpoint, it may actually be a favor for out-of-state merchants to collect the tax for you. i think asking consumers to keep the records is nutty, we have better things to do. (btw, sales tax could be made deductible for federal purposes, it once was, as state income tax is now.)

personally i'd nationalize sales tax if we're going to have one at all, the present system only works because it is unenforced. way too inefficient, both for recordkeeping and enforcement. of course getting all 50 states to agree on tax policy is ... fanciful.

Re:IRS?

[capoccia]

So, like the IRS, state tax auditors will have to find people to go after...

The IRS is barely investigating anyone, and they have a much larger enforcement budget than any state. Tax law enforcement by states is very low.

Re:It's not new, nor "Internet"

[Detritus]

I haven't heard of it being done recently, but I've read stories in the newspaper about state revenue agents staking out popular stores and malls in low-tax states that are near the border with high-tax states, looking for cars with out-of-state license plates and large purchases.