Promoting chess discussion.
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Chess Forum Promoting chess discussion. |
>My home state in the Northeast is now listing a line item telling >taxpayers to list how much we owe state coffers for online purchases for >the past year. (This has been theoretically on the books for years, but >only now is this item actually being printed on the tax return forms.) >But upon further investigation on different sources online and in >print...I'm seeing that this so called requirement is ultimately >voluntary...because how are states supposed to ENFORCE such an >impossible task like PROVING we purchased items we owe them taxes for >online purchases? Another problem is...which items are taxable and which >are exempt? Another is...if outside e-commerce sites aren't required to >collect tax info on out of state purchases who purchase items on their >sites...why should taxpayers keep this information? Since there is >little or no information on just exactly how "fair" the states have come >in ensuring online sales tax collection is "fair" why should taxpayers >believe this now? > >Any thoughts on this? If, by some accident, you were caught, what kind of penalties would be exacted for omitting the info on your tax form? |
including a line on the tax forms), there is also a use tax. This tax is owed on purchases in other states that would otherwise be subject to the sales tax if purchased in-state. In most states, if you purchase an item in another state but pay that state's sales tax, the use tax is not owed. This is not a new tax, but, because of some Supreme Court rulings in this area, states cannot compel retailers to collect the tax unless the retailer has a physical nexus in a state. As a consequence, many e-tailers (and catalogue retailers) are not collecting the tax. This does not mean that the taxpayer does not owe the tax; it only means that it is not being collected by the seller. In that respect, this is similar to those who have cash businesses or income. Here too there is no withholding of income, but the tax is still owed. While some may think this is harmless tax avoidance (although it really is criminal tax evasion), the playing field may be changing. There are, for example, some states that are actively considering seeking records from the UPS and Federal Expresses of the world to document out-of-state purchases by consumers. You can draw you own conclusion about their goal (and keep in mind provisions providing for penalties and interest where knowing evasion has taken place). At the same time, many of the larger e-commerce retailers are ready to voluntarily collect these taxes in return for a simiplified set of definitions of taxable sales and single audit from the collective states willing to adopt the Streamlined Sales Tax Initiative. I know that nobody likes paying taxes, but they are the price we pay for ordered society, according to Justice Holmes. The sales tax has long been one of the "three legs" of the state and local government tax stool (along with personal income and property tax); e-commerce, catalogue sales, and services have grown in prominance and erroded this base. This is the primary reason that rates have increased and some sales tax rates now approach double digits. This creates much more economic distortion (dead weight loss in economic parlance) than would a lower rate with a broader base. Iowa has this line on its tax form, and yes, I will be adding up my on-line purchases and remitting the use tax when I fil out my taxes. Randy Bauer "Mike Murray" <[email protected] > wrote in message news:[email protected]... > On 1 Feb 2004 19:59:17 -0600, Alberich <[email protected]> wrote: > > >My home state in the Northeast is now listing a line item telling > >taxpayers to list how much we owe state coffers for online purchases for > >the past year. (This has been theoretically on the books for years, but > >only now is this item actually being printed on the tax return forms.) > >But upon further investigation on different sources online and in > >print...I'm seeing that this so called requirement is ultimately > >voluntary...because how are states supposed to ENFORCE such an > >impossible task like PROVING we purchased items we owe them taxes for > >online purchases? Another problem is...which items are taxable and which > >are exempt? Another is...if outside e-commerce sites aren't required to > >collect tax info on out of state purchases who purchase items on their > >sites...why should taxpayers keep this information? Since there is > >little or no information on just exactly how "fair" the states have come > >in ensuring online sales tax collection is "fair" why should taxpayers > >believe this now? > > > >Any thoughts on this? > > If, by some accident, you were caught, what kind of penalties would be > exacted for omitting the info on your tax form? |