You may owe use taxes on out-of-state purchases

USA Today ^ | Sandra Block

[wallcrawlr]

Shortly after Robert Doyle of St. Petersburg, Fla., got married, he and his wife embarked on a pilgrimage undertaken by thousands of new homeowners every year. They drove to High Point, N.C., in search of furniture bargains.

They purchased several items, and as expected, a truck delivered their furniture three months later. But six weeks after their furniture arrived, they received something they didn't expect: a bill from the Florida Department of Revenue informing them they owed use taxes on their purchases.

[RonF]

This has been an issue in Illinois that has received more attention from the state lately. The Illinois State Income Tax form now routinely includes a use-tax form to report out-of-state purchases on. As the article states, there's no real concern over small purchases, but if you buy a car you may well get tracked down.

[Freeper 007]

It is funny they don't even mention the internet in this article. A "Use Tax" is basically a way to collect internet taxes without calling it that.

And as bad as this is, they don't even mention cigarette taxes. The states can hand out a huge hit at the end of the year to a pack a day smoker who buys online.

[coloradan]

Colorado: 2.9%. I can understand RI has a tax rate of 7%, but Mississippi?

[Freeper 007]

They are not looking to collect on small items TODAY, but once they get everybody used to the idea, they will work their way down. It won't be long until the credit card companies are sending duplicate statements each month to the State government to make sure we haven't bought anything online that wasn't taxed.

[max_rpf]

The lesson -- USE CASH!

[TrappedInLiberalHell]

I can understand RI has a tax rate of 7%, but Mississippi?

Most of that goes toward the artificial spine in Trent Lott.

[coloradan]

Use cash for large purchases? How come you have thousands of dollars on you? You must be a drug dealer. Here - we'll just take that from you. You can sue of to get it back, if you can prove you're not. (If you can afford a lawyer, LOL!)

[blackdog]

Use cash, but that red light camera system just snapped your plate # in the parking lot of the furniture store.The new ruling by the supreme court allows the IRS to just guess what you earned and tax you on it, so why not apply the same to purchases. I am sure they can come up with an average cost of a leather sofa.

BTW, get pulled over on your way to purchase your new living room while holding $8,000 in cash and I guarantee you that you just gave $8,000 to the asset forfeiture circus.

[max_rpf]

Good point. I remember in college I went out and paid for my first computer with cash. I will never forget how sweaty my palms were walking around NYC with 3000 in cash in my pocket!

[blackdog]

ROFLMAO! It is a transplanted spine from Stretch Armstrong.

[max_rpf]

Before you ask what the hell I was doing using cash: No Credit Card, new bank account (no checks), and a serious case of pcitis.

[Mr. Bird]

For once, it appears we have a case to which the Commerce Clause applies. They, I assume, paid sales tax on the items in North Carolina. How does Fla have the authority to tax it again? This also may impact free movement between the states. If I buy a home in Florida, then buy the furnishings elsewhere before I move in, can Florida tax me on the furnishings? "Use tax" my eye. Highway robbery is more like it.

[Still Thinking]

Zactly. The states are not scrupulous about making sure out-of-staters are not charged the local tax, so what business do they have trying to collect when their citizens buy out of state?? Also, the charade of calling a sales tax something other than a sales tax. The reason a sales tax can't be levied is obstruction of interstate trade. Well, I've got news for the states: this is a sales tax. (Pardon the soapbox, but this has been a pet peeve of mine for years.)

[wallcrawlr]

See http://www.taxes.state.mn.us/s alestax/factshts/salestax/1561 100.pdf

For some answers on what use tax is, why its collected, how its enforced and how the states know.

[AntiScumbag]

They, I assume, paid sales tax on the items in North Carolina

why would one assume that?

purchases for out-of-state delivery are generally exempt from tax, and the logical assumption would be that it wasn't taxed, because most people are aware of that common exemption, and would tend to object strenuously if the clerk who wrote the sales ticket included tax

[ex-snook]

So how about products from other countries too?

[Still Thinking]

So how about products from other countries too?

And, MY GOD, what if you made something for your own use???!!! We MUST find a way to pillory these disgusting self-sufficent scumbags at this time requiring national unity, not selfish self-determinism!