I just want to make a statement about sales tax and companies claims that if you buy over the internet from a company that is not in your state, you do not have to pay sales tax, and thus can save a few hundred dollars.
Well that is not really true. 46 of the 50 states have a use tax. Basically it is sales tax on purchases made out of state and brought into the state. The tax rate is usually the same as that on the sales tax. As a citizen of a state you are required to know what the law is regarding sales and use taxes and to pay them properly if it is required.
While right now inforcement of the use tax is not very strong, there are tremedous efforts in most every state and in the federal government in creating ways to enforce the use tax. State sales tax is the main income source for a state, and with the increasing internet sales, states are recognizing much lower revenues. This is creating a major need to reform the use tax and to start advidly collecting it.
Also, even if you get away with not paying use tax on items pruchased over the internet, most states have a 10 year statute of limitations to come after you. And if you are caught, it is not a pretty site. I have seen many cases where a taxpayer willfully did not pay use tax on a major purchase. Lets just say the repercussions were strict. Generally the penalties and interest are greater than the tax. Plus there are litigation costs. It can be a nightmare.
The U.S. Gov. is also getting involved to help the states. They are considering forcing the collection of use tax on out of state vendors, and creating a national use tax system that would roll down to the states to replace the lost revenues. Plus the U.S. Gov. is alway willing to help states determine who has not paid their use tax.
Just a little tid bit on sales and use tax. I have access to many article that descibe in detail the use tax of the various states. They do a much better job describing it than I do. If anyone would like any other info please let me know.
Rook
Well that is not really true. 46 of the 50 states have a use tax. Basically it is sales tax on purchases made out of state and brought into the state. The tax rate is usually the same as that on the sales tax. As a citizen of a state you are required to know what the law is regarding sales and use taxes and to pay them properly if it is required.
While right now inforcement of the use tax is not very strong, there are tremedous efforts in most every state and in the federal government in creating ways to enforce the use tax. State sales tax is the main income source for a state, and with the increasing internet sales, states are recognizing much lower revenues. This is creating a major need to reform the use tax and to start advidly collecting it.
Also, even if you get away with not paying use tax on items pruchased over the internet, most states have a 10 year statute of limitations to come after you. And if you are caught, it is not a pretty site. I have seen many cases where a taxpayer willfully did not pay use tax on a major purchase. Lets just say the repercussions were strict. Generally the penalties and interest are greater than the tax. Plus there are litigation costs. It can be a nightmare.
The U.S. Gov. is also getting involved to help the states. They are considering forcing the collection of use tax on out of state vendors, and creating a national use tax system that would roll down to the states to replace the lost revenues. Plus the U.S. Gov. is alway willing to help states determine who has not paid their use tax.
Just a little tid bit on sales and use tax. I have access to many article that descibe in detail the use tax of the various states. They do a much better job describing it than I do. If anyone would like any other info please let me know.
Rook
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