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Are You Reporting Your Internet Purchases?

michael posted more than 10 years ago | from the taxing-time-of-year dept.

The Almighty Buck 710

theodp writes "Over the next week, taxpayers in 19 states will be confronting new sections on state returns that ask them to fork over unpaid sales taxes for items purchased out of state, including Internet transactions. A NY Daily News editorial characterized the addition of use tax to state returns as a rip-off and advised taxpayers to fill in a zero on the line, although an accountant suggests doing so may even be worse than just leaving it blank and put you on the line for tax fraud."

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Theory: Niggers are ruining the country (-1, Troll)

Anonymous Coward | more than 10 years ago | (#8819714)

Yeah, I can see this working. *cough* (5, Insightful)

Liselle (684663) | more than 10 years ago | (#8819715)

Where is there a list of states participating in this? TFA only mentions two, and a lightweight Googling didn't reveal much more. I'm a Mass/Taxachusetts resident (so I consider the chances high), but I certainly didn't see anything on my state return about grey-area sales taxes.

Speaking of which, good luck if they wanted to collect. As the article mentioned, the honor system doesn't work. Not only that, being the organized person that I am, clearly I have kept an accurate record of every internet transaction I made in 2003. In short, the only way I can see these folks having a prayer of getting my money is by making a national system of collecting these taxes that is compulsory for retailers to take part in. Otherwise, it's doomed.

Re:Yeah, I can see this working. *cough* (4, Interesting)

setzman (541053) | more than 10 years ago | (#8819731)

Alabama is one of them, though it doesn't apply it to only internet purchases. It applies to any thing that you bought out of state and brought back home.

Re:Yeah, I can see this working. *cough* (4, Insightful)

Liselle (684663) | more than 10 years ago | (#8819860)

Alabama is one of them, though it doesn't apply it to only internet purchases. It applies to any thing that you bought out of state and brought back home.
That's interesting. A favorite Massachusetts activity, one that I did a lot as a kid, was hopping over the state line and going on a shopping spree in New Hampshire in the outlet stores. Makes me wonder if a nationalization of this sales tax deal will end up dinging the bottom line of online retailers. If people are cheap enough to go on a mini-vacation to dodge a 5% sales tax, certainly it might give them pause when they buy something from Amazon, and an invisible hand adds sales tax to the price where none existed before.

Honor system (0, Flamebait)

Anonymous Coward | more than 10 years ago | (#8819734)

of course the honor system works if they find i owe thousands of dollars, i will gladly pull it out of my ass

Re:Yeah, I can see this working. *cough* (1)

bri_n33 (665143) | more than 10 years ago | (#8819772)

California is another...

Re:Yeah, I can see this working. *cough* (4, Informative)

smackjer (697558) | more than 10 years ago | (#8819808)

Mass is definitely one of the states. It's on the tax return under "use tax".

Re:Yeah, I can see this working. *cough* (3, Insightful)

pbox (146337) | more than 10 years ago | (#8819826)

Your naivite needs to be addressed, while I am not even a paranoid person, I can think of 2 ways where they can go after you:

1. Get all your credit card info. When was the last time when you used cash (money order, etc) for your Internet purchases? Do not kid yourself, the banks would happily submit your finincial transactions to IRS for audit at the first request...

2. Carnivore. Nobody know what it is capable of. Would be trivial to monitor all e-commerce transactions if needed. SSL is not that secure...

Re:Yeah, I can see this working. *cough* (0)

Anonymous Coward | more than 10 years ago | (#8819902)

Might want to address your spelling, while you're going around addressing things.

Re:Yeah, I can see this working. *cough* (1, Funny)

Anonymous Coward | more than 10 years ago | (#8819924)

Only the most psychotic conspiracy theorists would believe that the FBI shares its intelligence data with the IRS.

It can't last like this. (4, Insightful)

OECD (639690) | more than 10 years ago | (#8819847)

Speaking of which, good luck if they wanted to collect. As the article mentioned, the honor system doesn't work.

That's exactly the problem they had with the income tax--once people realized how much they were expected to fork over, they refused. The solution in that case was to take their money before they ever got it. Now, states have some real control over employers and retailers within their jurisdiction, but they can't do a whole lot outside of it. I can't see this being very effective.

Of course, it's also convenient to have a system where everyone is a criminal, because you can use that against them on a selective basis.

Re:Yeah, I can see this working. *cough* (4, Interesting)

fiannaFailMan (702447) | more than 10 years ago | (#8819852)

the honor system doesn't work
Doesn't it?

There are people out there [givemeliberty.org] who say that there is no legal requirement to pay income tax to the federal government. I read last night about a guy that used to work for the IRS who resigned after doing his own research and coming to the conclusion that these people actually have a case. He hasn't filed a return since 1999.

How these people propose to fund the building of the roads that they will march on in protest is unclear, but it's an interesting case they put forward from a legal point of view.

Re:Yeah, I can see this working. *cough* (5, Informative)

Anonymous Coward | more than 10 years ago | (#8819987)

The IRS has a pretty comprehensive PDF online debunking most of these schemes.

http://www.irs.gov/pub/irs-utl/friv_tax.pdf [irs.gov]

While clearly the IRS is biased, they do cite many court cases that have legal precident covering many of these loopholes or misreadings of the tax code.

There was also a related article in the LA times last week which touched on the same topics

http://www.latimes.com/business/la-fi-taxman4apr04 ,1,7068670.story?coll=la-home-business [latimes.com] [registration required, blah blah]

Do you really want to poke the bear? (3, Informative)

Riturno (671917) | more than 10 years ago | (#8819857)

Taxachusetts counts. There seems to be a big push to pay use taxes on items not purchased in-state. As I recall there is even a box this year on the income tax form to declare these unpaid taxes. Also remember that Mass. has invested heavily in a new system to catch tax cheats. From the Boston Globe Archives:" STATE'S NEW TECHNOLOGY GATHERS INFORMATION TO FIND TAX CHEATS Published on February 15, 2004 Author(s): Bruce Mohl, Globe Staff If you get the urge to fudge a bit on your taxes this year because you think, "Who's going to notice?" think again. The state Revenue Department is watching. The agency has launched a technology offensive with the goal of pulling together stray bits of information about every Massachusetts taxpayer, searching for clues that would indicate who isn't paying the taxes they owe." http://www.boston.com/business/taxes/articles/2004 /02/15/states_new_technology_gathers_information_t o_find_tax_cheats/

Re:Yeah, I can see this working. *cough* (2, Informative)

afidel (530433) | more than 10 years ago | (#8819878)

Ohio is one, but then again it was on *last* years form as well. In Ohio at least it's just application of the use tax laws that have been on the books forever to a new area which the states fear could significantly impact revenues. In other words they are just pointing out that you need to report this new area just like you always were, of course from a bit of old research it seems that use taxes were never a big source of revenue due to their inherint unenforcability.

Re:Yeah, I can see this working. *cough* (2, Interesting)

awtbfb (586638) | more than 10 years ago | (#8819921)

Speaking of which, good luck if they wanted to collect. As the article mentioned, the honor system doesn't work.

Tell that to my cousins who got audited. The IRS nailed them on this since they had made some rather big ticket purchases.

Utah (1)

kuwan (443684) | more than 10 years ago | (#8819954)

I know that Utah does this, or at least they did last year.

No (1)

thebra (707939) | more than 10 years ago | (#8819726)

No

New York (1, Informative)

lake2112 (748837) | more than 10 years ago | (#8819727)

I know this has been implemented in New York.

Re:New York (0)

Anonymous Coward | more than 10 years ago | (#8819957)

What tax forms did you fill out? There was a line on mine for it....

Nevada? (1)

fo0bar (261207) | more than 10 years ago | (#8819736)

Hmmm... I live in Nevada and I'm wondering how this works. The article says that all states have use tax, but it is collected on the state income tax form. What does a fine upstanding citizen, in states like Nevada where there is no income tax, do to report tax on his online purchases?

Re:Nevada? (0)

Anonymous Coward | more than 10 years ago | (#8819779)

Are you a troll or just stupid? A simple google turns up this page with forms [state.nv.us] .

Re:Nevada? (3, Funny)

lcsjk (143581) | more than 10 years ago | (#8819781)

Send me a check for the amount you owe and I'll include it with mine.

All States do not have use tax (2, Insightful)

doj8 (542402) | more than 10 years ago | (#8819811)

From the article:
All states have provisions for "use tax,"

This is not true. New Hampshire has no sales or income tax. There is no use tax provisions. There are a number of other states without sales taxes and/or income taxes.

It makes me rather doubt the competence of the author who apparently didn't do basic research on his topic.

Re:All States do not have use tax (0)

Anonymous Coward | more than 10 years ago | (#8819874)

"New Hampshire does not impose any form of general sales tax upon the sale or use of tangible personal property within the state. New Hampshire does, however, levy a tax on meals, room occupancies, and motor vehicle rentals."

It makes me rather doubt your competence.

How about Washington State. (1)

Saeed al-Sahaf (665390) | more than 10 years ago | (#8819818)

Wonder how Washington State will deal with this, we don't have income tax .

By the way, we do have sales tax, but it's collected at the point of sale. Also we have horendous property tax...

Re:How about Washington State. (1)

strictnein (318940) | more than 10 years ago | (#8819891)

Also we have horendous property tax...

But you don't have income tax.

Re:How about Washington State. (0)

Anonymous Coward | more than 10 years ago | (#8819906)

Another guy who can't use google. Here is your site [wa.gov] . Sales tax is also at the point of sale. It is use tax that is collected afterwards. The idea being that the sale was in another state but you USE it in your state.

Re:How about Washington State. (3, Informative)

HungWeiLo (250320) | more than 10 years ago | (#8820006)

That's why many people have moved to Vancouver, WA. Lower property tax, no sales tax in neighboring Portland, no income tax, and mooching off of Oregon tax dollars by traveling on I-205/I-5 everyday.

Re:Nevada? (1)

dustinbarbour (721795) | more than 10 years ago | (#8819873)

I live in Nevada, too.. Las Vegas to be specific. Despite the recent state tax hikes, I'm still happy to be living ni Nevada where taxes are still relatively low. As for this internet sales tax, the state can kiss my ass.

Quote from the article (5, Insightful)

Anonymous Coward | more than 10 years ago | (#8819739)

I remember hearing a governor say that at some point, it's going to come down to having his highway patrol stop all the little brown (United Parcel Service) trucks and see where the stuff is from and where it's going.

Now if that wouldn't be a violation of the Commerce Clause, nothing would be.

Burden the taxpayer (2, Insightful)

ackthpt (218170) | more than 10 years ago | (#8819759)

This would be hard for me, considering I kept little record of online purchases over the past year. If it's a used item is it supposed to be taxed, too? What about all those books I bought from amazon.co.uk? (More of these on the way.) I'd rather online retailers just do the work for me. Then it's their problem if they try to cheat one state government or the other. (i.e. i report I bought $2,000 worth of computer hardware from a business, which collect sales taxes, but didn't actually turn them over.) I have no doubt its coming, but don't expect me to keep the records.

I understand there is an issue of fairness, assuming a state which doesn't collect sales taxes or has a very low rate sells a lot of merchandise to people in a state with high sales taxes, and local sales taxes (i.e. California)

Re:Burden the taxpayer (1)

Tenebrious1 (530949) | more than 10 years ago | (#8819967)

This would be hard for me, considering I kept little record of online purchases over the past year.

Can we claim ignorance? I've heard that you were supposed to claim it even before they added a line specifically for it. Anyway I was kinda suprised to see the line on NY's form this year. I didn't keep track of my purchases, hope I can claim ignorance. But next year, it'll be harder to do so.

Nobody did before, so why start now? (4, Insightful)

bluGill (862) | more than 10 years ago | (#8819762)

That line has been on my tax return for as long as I can remember. Of course when I first started doing taxes we didn't have internet sales, and it was intended to only apply to mail order stuff. I don't know anyone who put anything in that line back then, and I don't see any reason to expect that to change now that internet sales should be added in as well.

Re:Nobody did before, so why start now? (0)

Anonymous Coward | more than 10 years ago | (#8819868)

Absolutely.
In NJ, it's been on the books for as long as anyone remembers, and applies to mail-order/telephone sales as well as internet purchases.

I think the states realise it's currently unenforceable (they'd have to, I imagine, subpoena amazon and everyone else's records to show what you've bought, and it's really not worth it unless they're going to recover many many $), but they want a piece of a ever-growing pie, so they're looking for ways to get their mitts on it. Only legislation/completely re-doing sales taxes will really suffice, otherwise the retailers can just claim restriction on interstate commerce and be free and clear.

I can just imagine the audit now: "OK sir, now you have 0 for use tax purchases in 2003 - can you please show me you bought nothing from out of state that year?". Not going to happen.

If not $0.00 (2, Funny)

Electrawn (321224) | more than 10 years ago | (#8819768)

$6.66 should get the message across loud and clear.

Re:If not $0.00 (1)

happyfrogcow (708359) | more than 10 years ago | (#8819805)

$6.66 should get the message across loud and clear.

What's that, 1/100th of a SCO license? ;)

Re:If not $0.00 (0)

Anonymous Coward | more than 10 years ago | (#8819816)

Oh yeah. I can see that scaring them. I am sure they having a warning that comes up when the computer reads 666. Do you really think there is a little old lady somewhere who reads each return? Even if they did the millions of numbers they look at invariably 666 would have to come up at least once.

Re:If not $0.00 (1)

Electrawn (321224) | more than 10 years ago | (#8819951)

You missed the point, and I'll respond to an AC anyway.

Actually, its just an easy little suggestion of an act of civil disobedience. Someone will look at those numbers, and if they see a high amount of $6.66, hopefully alert some of those political types that the citizenry disapproves.

$6.66 is perfect since it is well recognized as a "bad" number.

Since it's a nonzero number, it may get you off the red flag and just into the yellow flag area. (Assuming they expect XX amount of taxes per income level.)

Just something for folks to do to voice displeasure in a collective manor. I'll be entering it on my IL return.

I live in oregon (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8819777)

sales tax is for suckaz and stuntahs

Wigger, put down the crack pipe... (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#8819829)

...and step away from the Eminem CD. Take off that wife beater, let the bleached hair grow out, sell that Civic with the fon-functional wing, and start talking like the strong Anglo that you are. You can keep your Negro whore, but just as a booty call.

I wonder (0)

Anonymous Coward | more than 10 years ago | (#8819787)

What would I owe if I bought used items online?

If they can't prove it. (0)

apparently (756613) | more than 10 years ago | (#8819788)

I'm not reporting it.

am i? (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#8819799)

Yes, I am.

And if you don't, you'll go to hell, just like those hippy linux bastards!

THERE IS NO FREE LUNCH! ;)

Interstate Commerce Clause (3, Informative)

nharmon (97591) | more than 10 years ago | (#8819801)

I'm curious, what part of Article 1 Section 8 of the U.S. Constitution don't these boneheads understand?

I know the states get around this by calling it a "use tax", but come on. Do you really expect me to keep track of everything I've bought across state lines just because you charge so much sales tax that the price of shipping makes up for the difference?

Re:Interstate Commerce Clause (1)

Wyatt Earp (1029) | more than 10 years ago | (#8819877)

It's not only that, it's a double tax, which folks don't usually like. Since the majority of people use a telephone line to make these purchases (Modem/DSL) they've already paid a tax per line, which the company at the other line is paying too.

Remeber that the phone per phoneline is going to pay for the War with Spain, so there is no way Congress can do away with that.

Now if you live in a state with sales tax, you've already paid sales tax on the computer or software or something else involved in the deal locally.

It's about time (2, Insightful)

NineNine (235196) | more than 10 years ago | (#8819810)

As a brick & mortar retailer, I'm sick and tired of losing businesses to cheapskates who want to shave a few pennies off, and don't give a damn about the businesses they choose to support or not to support. I say that that's the price you pay for shopping online (along with not being able to see the product, not know who you're buying it from, shipping cost and time... etc) It's about time that the playing field is leveled. Personally, I can't wait until this country turns into nothing but a bunch of Amazon.com warehouses with residential apartments in between, with little to no retail. THEN consumers will finally understand what they got themselves into, and I'll be long gone.

Re:It's about time (1, Insightful)

jasonditz (597385) | more than 10 years ago | (#8819846)

As a consumer that sounds like a pretty good idea to me too.

Re:It's about time (0)

Anonymous Coward | more than 10 years ago | (#8819851)

I'll be long gone.

With that attitude you should close up shop right now... you won't be missed.

Re:It's about time (0)

Anonymous Coward | more than 10 years ago | (#8819867)

Outrage comming from someone who has a porn site on the net with no warning or disclaimer before the XXX shit starts?

Re:It's about time (3, Insightful)

stomv (80392) | more than 10 years ago | (#8819895)

I live in a city and don't own a car.

If I walk to a retailer and buy something, I pay sales tax -- but no shipping and handling. If I order something online, I pay no sales tax -- but I do pay shipping and handling.

Six of one, half a dozen of the other. The reality is that warehouses have a lower per unit cost structure due to effeciencies, but have to pay to ship. When one cost is lower than the other, blammo. I think you'll find that most people who purchase new items online don't do it to save a "few pennies." They either do it to save tens of dollars, because they can't purchase the item locally anyway, or as a convenience.

In short, compete to offer your customers the lowest price/best service combination, or just STFU. The community will be better off either way.

Re:It's about time (2, Insightful)

NineNine (235196) | more than 10 years ago | (#8819958)

My point is that it's expensive as fuck to run a retail outfit, and consumers take that for granted. Hell, it's already happened with books. So many jackasses buy books online that you can't find a decent bookstore in real life. No such thing as hanging out at the bookstore, browsing, hitting on chicks, talking about books, etc. It's all plugged into the little glowing box, now, unless you want to go to one of the few remaining big box retailers. I don't know about you, but I sure as shit miss bookstores, and a town without a decent independent bookstore is pretty sad. That's my point. There's more to it than just price. Hell, in 20 years, Amazon will control most of the book market in this country, and if they dont' have it, you're fucked.

Re:It's about time (1)

ScottGant (642590) | more than 10 years ago | (#8819911)

I'm curious NineNine...what "brick & mortar" place do you have? You're a retailer, but what do you sell?

Your site points to "Free Porn". Are you in the porn business? If so, is it really better to go to a porn shop and "see" what you're buy? Just wondering.

But if you're not in that industry, what do you sell? Do you sell something that needs to be seen such as a musical instruments. Or something generic like books where you really don't have to see the product to buy it...as with Amazon.

I'm not trying to say or imply anything...I'm just curious. Is Amazon competition for you personally? If so, I can certainly understand your anger.

Re:It's about time (1, Flamebait)

NineNine (235196) | more than 10 years ago | (#8820004)

No, it's got nothing to do with books or porn. But it (this industry) is feeling pressure from online shopping (which I also offer, but hate to deal with). It's not even about my industry. It's that this country is turning into a country full of fat, pasty, apartment-dwelling, lazy mouse-clickers who don't really care about where they live and the stores around them. The homogenization of the country is accelerating, and all of this goddamn online shopping is closing stores right and left so that in many small towns, you've got a Wal-Mart, a grocery store, and the same tired string of fast food chains. Call me nuts, but that sounds pretty damn bleak to me.

Re:It's about time (0)

Anonymous Coward | more than 10 years ago | (#8819928)

Your attitude sucks, no wonder nobody buys from you.

Re:It's about time (5, Insightful)

tsg (262138) | more than 10 years ago | (#8819947)

As a brick & mortar retailer, I'm sick and tired of losing businesses to cheapskates who want to shave a few pennies off

Welcome to the free market. Thanks for playing.

Re:It's about time (1, Interesting)

Anonymous Coward | more than 10 years ago | (#8819974)

If it were truly a matter of "shaving pennies off", then you wouldn't have anything to be "sick and tired" of.

Example: I bought a new car stereo a few months back... The cheapest price I could find locally was about $125 more than it cost me to order online, and have it shipped UPS 3-day.

I'm all for supporting "local" businesses... And if this were, say, a $25 dollar price difference, I would undoubtedly buy locally, for some of the very reasons you state.

But for discounts of $125 or the like? You've got to be joking / stop your bitching.

Re:It's about time (0)

Anonymous Coward | more than 10 years ago | (#8819978)

You b&m retailers need to figure out how to provide value in exchange for your higher prices. As it is now, y'all claim to provide good customer service. Well, in my 20+ years of having money to spend, it has been my experience that customer service is a crap-shoot. Y'all talk about it, but when I need it, there ain't any to be found.

You figure out a way that I can have confidence in that service, or get an automatic, no quibble refund of the portion that goes to pay for "good customer service" and then I'll shop at your store.

At least with online shopping I know up front that I will get poor customer service and I don't have to pay for it which is fair. Personally, I don't think the b&m model will ever be able to reliably provide good customer service because the temptation to cut costs starting with that department is always there - so simple "reputation" will never be good enough.

brick and mortar (0)

Anonymous Coward | more than 10 years ago | (#8819991)

is deprecated..welcome to the internet superhighway.

How about don't even file (1)

argoff (142580) | more than 10 years ago | (#8819815)


If there's one thing I've learnt about government, it's far better to fight for pardon than to for ask permission. How do you know how far you can go, if you never even bother to test the waters. It reminds me of those movies where everybody was afraid not to cower to local bully, but if they all did they would all have been better off.

What's the sales tax on an MP3? (1)

Just Some Guy (3352) | more than 10 years ago | (#8819827)

I can see the RIAA pushing to incorporate tax fraud into the DMCA: "Well, you downloaded 1,500 MP3s at a value of $23.18 each, but didn't pay any sales tax on them. That's a mandatory extra 8 years!"

It worked on Capone...

God Bless Texas (1)

RailGunner (554645) | more than 10 years ago | (#8819828)

God Bless Texas and the other states that have no state income tax.

You know, this may actually be a good thing though - if more people get upset about their high rate of taxation, maybe they'll finally put pressure on the government to curtail spending.

Oh well, I can dream, can't I?

Re:God Bless Texas (1)

Carnildo (712617) | more than 10 years ago | (#8819950)

You know, this may actually be a good thing though - if more people get upset about their high rate of taxation, maybe they'll finally put pressure on the government to curtail spending.

It's called a tax revolt. Washington went through one of those in the past decade, and the result is that a lot of useful public services are getting cut. For example, the Spokane bus service gets a lot of its funding from vehicle license fees. However, the fees were recently cut by 90%+, and as a result, it's looking like half the bus routes are going to be dropped.

If you want us to pay (2, Insightful)

Anonymous Coward | more than 10 years ago | (#8819832)

If you want people to pay the tax it needs to be calculated and collected at time of purchase by the merchant.

If someone feels that this will kill the ability for some merchants to do business online, possibly, though it should not be any bigger of an inconvenience than figuring out shipping rates was when Ecommerce took off. Even so, I don't think it will hamper online sales anymore than consumers having to collect and collate receipts for taxes will. Plus there are a number of sites like Yahoo that will be able to use this as a new feature for their online malls.

North Carolina (3, Interesting)

emptor (576271) | more than 10 years ago | (#8819833)

NC has an interesting take on this; they have a line item for net purchases where no sales tax is paid. They also, however, have a handy way for you to estimate what you should pay if you don't know how much you bought online; they simply have you multiply your adjusted income by the state tax rate of 7% (7.5% if you live in Mecklenburg County, as I do).

Now, this galls me on several levels. One, they assume that every penny you earn is to be spent on sales-taxable goods in the Great State of North Carolina. Two, you definitely get the feeling that if you don't put some amount on the line, they'll be pulling your return for audit. It's almost a big brotherish attempt at coercing additional tax monies. Furthermore, if you buy something in say, SC, with a sales tax of 5%, they expect you to pay the difference between that rate and your rate.

Thank God I Live in Delaware (0)

Anonymous Coward | more than 10 years ago | (#8819848)

Sure am glad I live in Delaware, where we have no sales tax.

PNWED!

tax fraud? (1)

Mr.roboto (112555) | more than 10 years ago | (#8819849)

that's easy, you just don't sign your return and have a note attached to it that says you won't incriminate yourself. There's already precedence for this, too lazy to google it hoever =0

Good thing (1)

Neil Blender (555885) | more than 10 years ago | (#8819854)

It's a good thing I filed my taxes last year before this law went into affect.

New Hampshire (5, Informative)

djhertz (322457) | more than 10 years ago | (#8819859)

Here in N.H. there is no sales tax. I often forget that other states even have sales tax. It seems I am only reminded when I am on vacation, and the clerk wants me to pay $10.55 for the item that is clearly marked at $10.00. Then I get this dumb look from the poor person behind the register, "Uh, sales tax?"

It makes me wonder, how our state can run without sales tax, and without state income tax. I mean, it's a wonder we survive at all! Now, look at Mass, and California, loads of taxes! Boy, those people sure are better off with all those taxes and government programs! But, I digress.

Seriously, if you live in NH, and you buy goods over the Internet, no tax, case closed, Live Free or Die!

Re:New Hampshire (2, Insightful)

Anonymous Coward | more than 10 years ago | (#8819931)

I live in Alaska, no income tax, no sales tax. (sure is property tax though!)

Re:New Hampshire (4, Insightful)

absurdhero (614828) | more than 10 years ago | (#8819963)

Does your state have property tax? It is possible that your property tax is far higher than it is in California. And in California, property taxes do not increase when the value of your property increases. This creates a situation where the state isn't getting nearly as much money from property taxes as other states. And what about car registration? In California, registration is much lower than in other states. So watch out for all of those taxes you are taking for granted!

God forbid people pay their taxes... (1, Interesting)

Anonymous Coward | more than 10 years ago | (#8819861)

We don't need the luxury of schools, roads, etc.

Fuck you, jackass (0)

Anonymous Coward | more than 10 years ago | (#8819964)

We also don't need billions poured into bullshit waste, tens of thousands of government employees who don't actually do anything, and legions of illegal aliens.

We just had a state legislator state that he wanted to write a bill that would make government buildings follow the rules of Fung Shui. I have have to pay more taxes for *that* motherfucking bullshit?

Schools? All the money goes into the pockets of the administrators and other scammers. The amount of money we already spend per child should be churning out armies of geniuses.

So take your self-righteous, naive idiocy and cram it in your ass.

Re:God forbid people pay their taxes... (0)

Anonymous Coward | more than 10 years ago | (#8819981)

Why can't those be paid for with current taxes?

Our schools need better management, not more money.

Slashdot Tax Cheats (2, Funny)

pipingguy (566974) | more than 10 years ago | (#8819869)

Did VA Software get audited, or what?

Which state governor said this? (1)

Ra5pu7in (603513) | more than 10 years ago | (#8819870)

"I remember hearing a governor say that at some point, it's going to come down to having his highway patrol stop all the little brown (United Parcel Service) trucks and see where the stuff is from and where it's going."

I picture shipments being stopped in customs or requiring documentation in triplicate as to contents and recipient state and whether states sales tax has been paid. "Sorry, ma'am, but we can't let you take that sofa into California without these forms filled out completely."

It's called "use tax", it's not new (0)

Anonymous Coward | more than 10 years ago | (#8819885)

All states have had "use tax" on the books for as long as I've known. The problem is that interstate commerce is the realm of the federal government, as outlined in the Constitution, so it's unlikely that these taxes are constitutional. Of course, consult your own attorney, but I have searched lightly and not found any court case that has upheld them. The bottom line is that, Constitutionally speaking, no state has the right to tax or otherwise affect interstate commerce.

Sorry for anonymous, but I don't even want to deal with this.

This isn't new! (1)

ThisIsFred (705426) | more than 10 years ago | (#8819888)

I'm surprised that we're hearing about this now. It just reinforces my theory that the majority of taxpayers have no clue that a "Sales and Use Tax" exists in their state, and has existed before the Internet was commercialized. It must cost a lot to enforce this, and in my home state, they make it very difficult to be honest on your S&U tax form (because revealing such information will most likely make them look into your buying habits in the past, or those of your spouse). Since the penalties include jail time, it is akin to self-incrimination if you just pick up and pay for the first time.

A little misleading (2, Informative)

Ra5pu7in (603513) | more than 10 years ago | (#8819901)

As to what states are "adding" this - actually only CA and NY are new to this. The article says they are joining 17 other states that ALREADY did this.

Unconstitutional (5, Informative)

cubicledrone (681598) | more than 10 years ago | (#8819903)

Article I, Section Nine:

No Tax or Duty shall be laid on Articles exported from any State.

Additionally:

No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.

One state cannot tax a purchase made in another state. Taxes are too high as it is.

Slashdot subscription (3, Interesting)

daveo0331 (469843) | more than 10 years ago | (#8819905)

Do I have to pay a use tax on the cost of my Slashdot subscription?

Re:Slashdot subscription (0)

Anonymous Coward | more than 10 years ago | (#8819936)

Oh come on man. Now you are showing off your fancy * thingy and I am still struggling to create my own id.

Wonderful (0, Flamebait)

the_mad_poster (640772) | more than 10 years ago | (#8819909)

I like the concept here.

We're the government! We don't think we're taking enough of your money! Therefore, we're going to start taxing you more! We're not going to tell you why, or where your money will go! You have to wait to find out! And even then, it'll be a real bitch to figure out exactly what we're doing with it, and some of it will be intentionally hidden from you!

Hooray for the government! yay!

Fuck that, buncha goddamn assholes ARE ripping us off. Fuck their wars and their huge ass government and their pork barrel highway bills. Fuck their wages, fuck them. Fuck their "faith based initiatives". Fuck their pet projects and their payoffs to foreign nationals.

How is this Constitutional?! (1)

Anita Coney (648748) | more than 10 years ago | (#8819912)

The US Constitution forbids interstate taxation. I.e., a state cannot put up toll booths on its borders and tax out-of-state purchases. However, that is EXACTLY the purpose behind Use Taxes.

Florida Doesn't have State Income Tax (1)

SnowDeath (157414) | more than 10 years ago | (#8819916)

W00h000! Not a problem for me and the rest of us idiots that don't know how to vote ;)

State sales tax is outdated (2, Insightful)

Anonymous Coward | more than 10 years ago | (#8819919)

In olden days, most of the purchase used to be within state and making out of state purchase was very expensive. So the state level sales tax made sense. In today's world, the sales tax at state level makes no sense. Transportation, shipping is way cheaper than they used to be. There should be federal sales tax common for all state and each state would get contribution (from federal govt) based on where the product was purchased/shipped.

And how are they going to know anyway? (1)

zx-6e (604380) | more than 10 years ago | (#8819923)

So the states get reports from some on-line vendors about sales in their states. But how does the state know that it was me that bought that item instead of someone else.


Using the shipping address just means that I now start shipping my purchases to my office or to a mail drop somwhere. Still doesn't prove that I bought what they think I have...

Taxation is Theft (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#8819929)

By definition. Prove me wrong. And to preemptively eliminate the standard responses:

"Taxation is okay because it's voted on democratically." False. If you are a room of 30 people and vote to take one person's watch, that is theft. Might doesn't make right.

"Taxation is okay because we need [some government service]." False. If I go, armed, to your house and say "give me all your money I need to [build a road, build a spaceship, pay a politician, give it to medical researchers, etc.]", it may or may not be for a good cause but it is still robbery.

The real reason (1)

Damiano (113039) | more than 10 years ago | (#8819937)

A number of people here commented that this will be useless as no one will report their purchases on their tax returns.

They don't expect you to. What they are doing this for is so that when you willfully fail to declare your out of state purchases they can go after you for tax evasion.

HRblock (2, Informative)

superpulpsicle (533373) | more than 10 years ago | (#8819943)

I just did my taxes with H&R block. I specifically ask whether there needs to be any Internet purchases claimed etc etc. Basically I am avoiding doing taxes twice / audits etc.

H&R Block said NO!!

My state doesn't have sales taxes... (1)

BgJonson79 (129962) | more than 10 years ago | (#8819952)

You insensitive clod!

We don't have income taxes, either ;-)

Michigans had this for 2 years I think (2, Insightful)

m0ng0l (654467) | more than 10 years ago | (#8819955)

And I have yet to report anything on that line. Not that I feel I am trying to rip off the state, but having at one time worked for a mail order company, who often did *NOT* have to charge sales tax on out-state purchasers.

I do not see how ordering something from a company who is based soley out of, say, CA, is any different than if I do it via mail order, or over the phone ordering.

I can see paying sales tax if I order from a company like Crucial memory, who most likely has offices in Michigan. The line on a state return though, just smacks of "you didn't spend all your money in-state, but we're going to pretend you did." Does that mean the next step will be to make people pay their state sales tax on items bought outside the state?

Will their be border crossings erected between Michigan and Ohio, and you'll have to declare what you purchased in Ohio, and pay the Michigan sales tax on it?

Sheesh.

Jason A.

Paraphrase from "The Big Lebowski" (3, Insightful)

legLess (127550) | more than 10 years ago | (#8819956)

To paraphrase from The Big Lebowski:
Yeah, I've got a whole team of detectives on it. We're working in shifts.
The only way to enforce laws like this is to effectively remove any expectation of privacy from every Internet transaction. That's going to be very difficult.

A smarter way would be to have a smarter tax system, like a Value-Added Tax. Tacking sales tax on as an after-thought is stupid, and creates many more problems than it solves. With a fairly simple system (Person A hands a stack of bills to Entity B; B hands A a Widget; B makes an entry in a book) its worst flaws aren't really exposed. With side-spread digital transactions for digital goods it simply cannot be maintained.

Which states? (5, Informative)

Xeo 024 (755161) | more than 10 years ago | (#8819959)

Many of you seem to be wondering which states this affects. Well, according to an article [slashdot.org] posted last month on SlashDot. The following states are collecting Internet taxes:

States with sales tax lines on their tax forms include Alabama, California, Connecticut, Idaho, Indiana, Kentucky, Louisiana, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Rhode Island, South Carolina, Utah, Vermont, Virginia and Wisconsin, according to the Federation of Tax Administrators.

Read more about it here [myway.com] .

Nothing new here... (0)

Anonymous Coward | more than 10 years ago | (#8819965)

This isn't unique to the internet - most states require that you pay sales tax on all products bought out-of-state, either when on an out-of-state shopping trip or through a catalog.

Do77 (-1, Troll)

Anonymous Coward | more than 10 years ago | (#8819968)

tto many rules and volume of NetBSD [samag.com] in the

two words (0)

Anonymous Coward | more than 10 years ago | (#8819992)

Fuck them.

Virginia was already doing this last year. (2, Interesting)

lazypenguingirl (743158) | more than 10 years ago | (#8819997)

When I came across this last year, it surprised the hell out of me (definitely merited a "WTF?"). I generally don't keep track of my online purchases (in as far as differentiating them from non-online purchases). And what about things I've bought from outside the country (import CDs et al)? Do those count? Seeing as how I didn't want to get in trouble, I made a rough estimation, but then again, how about the places I've bought from that ALREADY incorporated sales tax? I don't remember which they are, I don't keep records that closely on that stuff. Let's hope little graduate student me doesn't attract attention and get audited on my cute little minimum wage income. Because that would sickening if citizens are getting in trouble for this, while 60% of corporations didn't submit taxes 1996-2000 (was in the news this week). *sigh*

No Way In Hell (1)

Explodo (743412) | more than 10 years ago | (#8820001)

I make several thousand dollars in on-line purchases of bike and computer parts each year. I won't ever report them.

Use Tax - my story (1)

aacool (700143) | more than 10 years ago | (#8820008)

I was filling out my Wisconsin returns recently, and I paused at the Use Tax line. I left it blank, and agonized over it for a while - not sure whether to leave it blank or put in a valid value

After much soul-searching, and looking around at all the manifold books, dvds, etc. I've bought online, I finally decided to compromise and provide an amount on the largest(size) item i could see that I'd bought online - a home theater system from an NY retailer - this cost $400 and at 5.6%, that works out to approx $20.

Well, I've sent it off, and feel somewhat easier, but as confused as anyone about why one state should care about goods purchased from another state if the retailer is not registered in the second state.

Of course, with the strength and ease of data-mining, this may be very easy for revenue agencies to collate and use in an audit. In which case, I might be better off:)

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