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Online Cigarette Customers Get Bill from State
wakebrdr writes "The Michigan Treasury Department has sent bills to state residents who purchased cigarettes online to avoid Michigan's high taxes. One pack-a-day smoker received a bill for $2,500 in back taxes. If a simple subpoena of customer data allows them to easily go after lost cigarette taxes, how long until state treasuries across the country subpoena Amazon.com or other big online retailers to collect unpaid sales taxes?"
This seems dangerous to consumers. States can, at any time, subpoena Amazon.com and other online suppliers to regard tax revenue? What's the statue of limitations on this? Most states are hard up for tax dollars right now, and this could be one very scary way for states to generate revenue. Just a thought...
Massachusetts has a state use tax. Anything bought and used in the state is taxed at 5% -- same as the sales tax, just with a different name.
P er sonal/issues/Usetax.htm
However, there's an alternative to paying it. There's a "safe harbor" provision that says if you pay a certain fixed amount based on your income, they won't come knocking on your door to check what you bought with one exception. The "safe harbor" only applies to items under $1,000. If you buy 150 widgets for $999 apeice at seperate times, you're fine, you can pay $15 "safe harbor" tax if you make under 40,000 (or $0 if you make under 25,000).
Confused yet?
http://www.massdor.com/help/guides/abate_amend/