States bent on collecting tax on Internet purchases

boston.com ^ | 6 March 2004 | Michael Gormley

[SheLion]

ALBANY, N.Y. -- Remember all those gifts you bought online during the holidays? Now it's time to pay sales tax on them, at least so say the income tax forms of 20 states, including Maine.

The latest to outstretch that revenue-seeking hand are New York and California, which this year added a line requiring taxpayers to declare any tax they owe on out-of-state purchases.

[SheLion]

[ECM]

Congress would have to enact a law, however, to make such a system nationwide.

Voters to Taxaholics: Drop dead.

[Sunshine Sister]

Well said. It's not their money! Just try and tell them that and watch them go ballistic!

[Mears]

I had my taxes done today here in Massachusetts and it does my heart good to see these bureaucrats all in a twitch over something like this.

It just never occurs to them that maybe we are sick of all the taxes and the out of control spending that goes along with them.

[CSM]

This points out the obvious attitude of politicians. They think it is their money and any revenue drop is considered a loss. When they remember it is our money, things will change.......I'm not holding my breath.

[Madame Dufarge]

Let's just have our paychecks sent directly to the tax agencies and they can send us some government cheese to eat and a tarp to protect ourselves against the elements.

That should just about cover the basic needs and prevent "greed."

[concerned about politics]

Liberal NYC and California. Someone has to pay for the mess liberalism leaves behind.
All those druggies, sloths, homos riddled with disease, unwed mothers, homeless people, unemployed "environmentalist", failing indoctrination centers, sludge/garbage and sewer clean up, food banks.... You name a social disaster - any social disaster - and it'll be found in the liberal cities because of their liberal policies every time.

If it's infectious or deadly - it's liberal.

[Egon]

Ping.

[steve-b]

States bent on collecting tax on Internet purchases

Since they're already "bent", I suppose it's redundant for me to tell them to "get bent".

But I will anyway.

[IYAS9YAS]

Idaho has had this for a long time. It was put in place to account for mail order catalog sales. Basically, it is a use tax, not a sales tax as for it to be sales tax, the sale has to be in Idaho.

Use tax applies on things that would be normally taxed under the sales tax rules but the sale didn't take place in Idaho. If a company has a physical presence in the state, they will charge you sales tax on your purchase over the net anyway, as they are required to by current law.

Most states have a use tax to go along with the sales tax to cover sales to you not made in the state.

As an aside, for all of those saying consumption tax is the most fair, then to consume and not pay the tax, it is a bit hypocritical. Don't get me wrong, I'm not for more taxes. It is just an observation.

[microgood]

Who, he asked, "keeps tabs of what they buy on vacation in the Bahamas or Canada? Or anyplace? It's crazy. It's insane."

Its like the states own you and no matter where you go you owe them. I'm surprised they don't tax you after you move out of the state - you are my little tax slave for life no matter where you are.

[bird4four4]

True, but is should be up to the reseller to collect and report sales tax, not the consumer. Can you imagine if Sears sold you something and didn't collect tax, and you were expected to retain proff and mail in the tax at year end? Who would the State go after Sears or you? So why on the internet are they going after the individual?

[concerned about politics]

True, but is should be up to the reseller to collect and report sales tax, not the consumer.

Yep. The thieving tax collectors can bite me.
I'm not going to start making my bricks without straw because some left wing losers "choose" not to work to pay their own bills.

(We need an anti-Tax Moses to deliver us from government bondage).

[richardtavor]

That actually happened to me once. I got a tax bill for a car that I owned from the state where I moved from -- 3 years after I moved. I politely sent a gas company receipt and a nice note to 'stick it.'

[Skooz]

I don't remember voting on this.

I am already bled dry by the Taxula vampires.

[IYAS9YAS]

Ultimately the consumer is responsible as that is where the burden lies. For everyone else, it's pass-through. That is why it is called "use" tax, not "sales" tax. Like I said, they apply the same way to the same thing except one is for the transaction taking place within the state and the other is for transactions taking place outside the state and being shipped to you.

As far as retaining proof (receipts), that is your burden in the states where this applies. The fact that practically nobody sends anything in on this line is where the futility in collecting this lies. They can't audit everyone and the burden of proof of tax due is on the state, not you. The good thing is, with most statute of limitation laws, if you file the return, even incorrectly, they can only go back so far (excepting fraud or other understating income issues).

I don't mind the sales/use tax. What I hate is the property tax. Ultimately, lowering the cost of government and the burden on taxpayers should be the goal, not looking for new sources of revenue. But if you have existing laws in place, they should be applied evenly.

[philetus]

California Tobacco Tax Created a Pork Barrel
By Thomas J. DiLorenzo*

Coloradans are now considering adopting a new tax on tobacco products, almost identical to California’s “Proposition 99,” passed in November 1988. Led by the unlikely role model of Sen. Ted Kennedy (D-Mass.), a national coalition of nonprofit sector political activists is seeking to force Americans to adopt their version of “clean living” by taxing “sin” and using the revenues for propaganda campaigns on behalf of even more taxes and activism. Before Coloradans jump on this neo-puritan bandwagon, they should consider the California experience.

California voters passed a referendum in 1988 that increased the state’s cigarette tax by 25 cents a pack (the proposal is [stet] [in] Colorado is in excess of 50 cents a pack) and earmarked the funds for anti-smoking education in schools and communities, hospital and physician treatment of indigent patients, research on tobacco-related diseases and “environmental concerns.” The last category was apparently established to buy the support of environmental groups. Over $500 million per year has been raised from the new tax.

Proposition 99 has created a giant pork barrel for a vast network of public health bureaucrats and nonprofit political activists organized under the umbrella group, Americans for Nonsmokers Rights (ANR), whose spokesman, Glenn Barr, has stated his goal as to “force them [smokers] to do the right thing for themselves.”

The law has showered the public schools and local chapters of the American Cancer Society, American Lung Association and American Heart Association with over $150 million to ostensibly teach kids to be nonsmokers.

But in reality much of the money has been squandered on student “gift” programs that give away backpacks, gift certificates, movie tickets, compact discs, radios, sports equipment and even lottery tickets as “rewards” for promises to quit smoking.

Some school districts have used the funds for pool parties, carnivals, trips to Yosemite National Park and to sponsor “outrageous stunt” contests that award prizes to whomever performs the weirdest feat to shock a loved one into stopping smoking. Past winners include a girl who consumed an entire can of “Mighty Dog” dog food.

Since no serious effort is made to verify whether students have taken up smoking or not, the program is simply a giant giveaway of taxpayers’ money and another government make-work program for “public health” bureaucrats and nonprofit sector political activists.

A survey by the California Department of Health Services failed to detect any decline in adolescent smoking, and some health researchers believe the program may actually increase teenage smoking by making it so taboo. A state-funded evaluation of the anti-smoking education programs by University of California professor John P. Pierce concluded that they had “no effect on tobacco use.”

Proposition 99 forbids the use of tax funds “to promote partisan politics or candidates” or “to promote the passage of any law.” But the tax-funded political activists have blatantly flouted the law from the very beginning by lobbying for literally hundreds of anti-smoking ordinances.

For example, Contra Costa County published minutes from a public meeting in which it said it would “play a crucial role in mobilizing community support” for a proposed ordinance. Sacramento County has sent out flyers urging voters to pass an anti-smoking ordinance in that county. Employees from Butte County have spent time lobbying for more restrictive smoking laws. And a three-day, Proposition 99-funded conference in Los Angeles in 1992 was entirely devoted to discussing political strategies.

Government officials and nonprofit political activists have thus far gotten away with violating the law with regard to political uses of Proposition 99 funds by claiming that the funds are used for “education,” not politics. At the 1992 Los Angeles conference, a San Luis Obispo County Health Department official, Barbara Wells, boasted how she skirted the law by lobbying for an anti-smoking ordinance with Proposition 99 funds under the guise of “education” while in reality building a “politically-active community.”

Most of the research funded by Proposition 99 is so useless that even the legislative sponsor of the law, state assemblyman Phillip Isenberg, is demanding a reallocation of funds away from research and toward indigent and prenatal care. He and other legislators are skeptical of the value of testing to see if smoking causes skin wrinkles, “discovering” that teenage “trouble makers” tend to smoke, or showing that your teeth will turn yellow if you begin smoking as an adolescent.

Some of the “research” money is used for political intelligence gathering and “doesn’t deserve to be classified as research,” according to California Assembly Speaker Willie Brown. Professor Stanton Glantz of the University of California at San Francisco (and president of Americans for Nonsmokers’ Rights) has received some of the largest research grants for his work “tracking tobacco industry activities in California” which Brown says “is what we in politics do to each other when we’re running for reelection” and has nothing to do with disease research.

California’s Prposition 99 has created a enormous bureaucracy that has “taken on the garb of a religious crusade,” according to state assemblyman Isenberg. Currently, the “crusade” is for a “smoke-free society,” but this is obviously just a stepping stone to restricting and outlawing other kinds of politically-incorrect behavior as well. As ANR co-director Julia Carol recently told The Washington Post, if tobacco “magically disappeared,” they would “simply move on to other causes.” In just the past few months, neo-Puritanical political activists have issued reports condemning hot dogs, movie theater popcorn, beer, steak and even golf courses!

If California’s Proposition 99 establishes a trend, Americans can expect to see more of their tax money used by neo-Puritanical political activists to whittle away at their personal freedoms. For, as economist Ludwig von Mises once said, “Once the principle is admitted that it is the duty of government to protect the individual from his own foolishness, no serious objections can be raised against further encroachments … If one abolishes man’s freedom to determine his own consumption, one takes all freedoms away. The naïve advocates of government interference with consumption … unwittingly support the cause of censorship, inquisition, intolerance, and the persecution of dissenters.”
*Thomas J. DiLorenzo is Professor of Economics at Loyola College in Maryland, research fellow at The Independent Institute, and contributing author to the Institute’s book, Taxing Choice: The Predatory Politics of Fiscal Discrimination.

[IYAS9YAS]

So why on the internet are they going after the individual?

Your analogy is almost right but Sears is a bad example. If your state had a sales/use tax and Sears had a physical presence in your state, Sears would be required to collect sales tax from you on your purchase via the net. Whether you pick it up at the local store or it gets shipped to you. However, if you buy something from someone, get it shipped to you and they have no physical presence, they are not required to collect sales tax and you, technically are required to pay it. Like I said, good luck collecting. There are far too many people to look at.

Personally, I see nothing wrong with paying sales tax on something I bought on line. It's no different than buying at the store and paying the sales tax there. The principal is the same. It's the transaction.

Again, the point should be to reduce government cost and burden. Not to go after some poor shmuck who owes 73 dollars in sales tax for internet/catalog purchases.

[philetus]

Pork

It's not JUST the other white meat.