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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 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?
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.
... fanciful.
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
IRS: You left this line blank. Are you trying to tell us that you have not made any out of state Purchases?
.. what?? I said I didn't make any out of state purchases.. !
Consumer: Yes.
IRS: Can you show us your out of state reciepts to prove your claim.
Consumer: Uhh
IRS: Damn that usually works.