Posted on 03/09/2011 5:57:14 PM PST by Freedumb
If you think making purchases online means you don’t have to worry about paying the state sales tax, think again.
As the state continues to grapple with a big deficit the Illinois Department of Revenue this year has begun targeting those purchases on state tax forms and is seeking to collect.
This year, for the first time, taxpayers are being asked how much they owe in so-called “use taxes” on the Illinois 1040 tax form. The law already required taxpayers to pay the “use” tax, but it wasn’t listed on the basic form.
A use tax is a form of sales tax that applies to purchases made outside Illinois, but used in the state. The tax, which is 6.25 percent of the purchase price, applies to online purchases made from businesses that don’t have brick and mortar locations in the state and that don’t charge Illinois sales taxes, according to the Illinois Department of Revenue. That includes companies like Amazon.com, but not Barnes & Noble or Macy’s, who charge sales taxes online. The “use” tax also applies to catalog and home shopping network purchases from out-of-state companies that don’t charge sales taxes.
The state expects to collect $5 million to $6 million in such taxes this year, said department spokeswoman Susan Hofer.
For taxpayers who know how much they spent, the 1040 instruction forms include a worksheet to help calculate what is owed.
If you made such purchases but are clueless on how much you spent, the forms include a guide in estimating how much you owe, based on adjusted gross income. For individuals with income between $50,001 and $75,000, the state estimates that such purchases amounted to $608, and the estimated tax owed is $38. For those with incomes between $20,001 and $30,000, purchases are estimated at $240, and the tax owed is estimated at $15.
The state expects filers to honestly report what they owe. And if the state later finds out that you owe more, you can face penalties and interest, Hofer noted.
While the amounts aren’t much, the tax still “kind of hit people between the eyes because they didn’t expect it,” said Judi Strauss, an enrolled agent and owner of Strauss Tax Service with offices in Chicago and Downers Grove.
Taxpayers can’t leave Line 22 blank on the 1040 form, but they can put in zero if they don’t owe anything, she said.
Strauss advises consumers going forward to keep track of what they actually do buy from virtual stores online. “Look to see if the store charges sales tax,” when you check out, she said. “Keep a running total all year.”
The tax law is not new nor is it unique to Illinois, said Carol Kokinis-Graves, senior writer analyst with Riverwoods-based CCH, a provider of tax and audit services.
“In most states, the use tax was enacted at the same time the sales tax was enacted,” she said. “However many people are simply unaware of their use tax obligation and don’t pay it.”
Illinois is offering an amnesty program on the tax covering purchases made from July 1, 2004, through the end of last year.
The state isn’t alone in trying to collect. “Many states are experiencing severe budget crises,” Kokinis-Graves said. “As a result, they are aggressively looking for additional methods to collect taxes they are owed.”
If this weren't the most notorious gang of crooks scoundrels and hypocrites on the planet, the state being broke from lefty policies corruption and mismanagement (redundant, I know) they might appeal on the grounds of need the way any beggar with a modicum of legitimacy and self respect might.
But no, these rats feel they must resort to the old familiar bullying shakedown tactics of cheating subterfuge and lying knife in the back deceit.
Most states, including Texas, do require online shoppers to pay Use Taxes.
Actually, I think you just pled yourself as a law-breaker, a tax cheat, and someone who thinks that other citizens of your state should have to pay for your free-loading.
Not much different than what conservatives usually attack liberals for.
Illinois is one of the 5 worst states in the Union.
Nice.........
I hardly think your decision not to pay your sales/use tax is like the boston tea party (where they took goods and threw them in the water, not where they secretly avoided paying taxes on those goods).
In and of it self it may not be a big deal but each one of these taxes and laws is a straw. The story of the straw that broke the camels back is getting real, the same as for our founders. The tea tax was a straw, but it was the final straw.
Revolutions begin small. First they are private rebellions and then they become open. Would your really believe that throwing the tea in the water was the first step? Like you I am an honest person, and I struggle with this issue. The enemy knows we are law abiding and uses it against us.
Will you be law abiding right up to the point where they take everything from you? When does your revolution begin?
Oddly, that is my argument for why we need to fix it so the sales tax is collected by the companies -- because that is why the burden falls on every individual. A vast majority of the companies already have a process to collect and remit sales tax, at least to ONE state, so if we simply had a central software system where every state's sales tax was kept, it would take very little effort to upgrade online sales programs to use it.
Amazon already has the ability to collect sales tax for virtually all the states, because it's software front sells products from companies like Target and others which have presence in most states.
I will remind you that you are guilty of several laws before you get of out bed this morning.
I doubt most of us are breaking laws while we sleep; but clearly we all break laws, just as we all break the commandments of God. The question is whether we do so deliberately.
If you want to rebel against the "use tax", I think that's great. But please, actually DO the rebelling. If people spoke up about their refusal, we could get the laws changed. It's all the people who keep silent, and surreptitiously break the law without notice, that do little to solve the problem.
IN fact, my goal in these threads is two-fold; first, to let honest people know that they are breaking the law, so those honest, moral, upright people can correct their error. And second, to get those same people mad enough to actually DO something about it.
You're confusing the law with morality. They are not one and the same.
Making it easy to collect taxes is your goal? The costs of these taxes should be in our face! You shouldn't have withholding on your income tax, you should write the check. Note this one is in our face and no pays it because it finally is real. I wish more taxes were like this.
You want to shift the collection costs over to Amazon? Why should they pay the cost?
I attended a city council meeting regarding building codes and the first thing out of the mayors mouth was, “I don't care about you and I don't care about your problems......” This is what most of politicians think of us. I am NOT going to feed the beast that is going to take everything away from me. Go ahead if you want. I have vowed to buy as much as I can outside of this city so I don't pay local sales tax. I am going to stop making improvements because all they do is tax me on it.
As I asked, when does your revolution begin? Did playing nice with King George get them anywhere? I'm sure you are a nice guy but I would not go into battle with you.............
Regarding God, I don't think not doing it deliberately is an excuse, (at least I am not going to use that excuse on judgment day, you can if you want). We are all guilty and deserve death, it is only grace that stops our just rewards. But God is at least nice enough to get it down to 2 rules. We used to operate with the golden rule and you and I do but most of the rest of the world doesn't. Their touchstone is all the myriad of rules and regulations. They don't care about you, they care about the rules and regulations. That is where their power lies. The battle needs to be fought on EVERY front, within the system and large and small resistance.
You were the one who complained that the cost to you of the tax was too much; I was agreeing with you, but apparently that was just an argument to justify not paying your taxes? If you can justify not paying taxes because they are just too hard, but you object to making it easier, then what, do you just expect Bill Gates to pay all the taxes so you could have a military to defend your freedom?
Yes, I am PRO-TAXES. I believe that we need a government, and I believe that we should actually pay for the government, and not just borrow the money and make our kids pay for it. I also think government for the most part is way too big, so our taxes should be lower, but that doesn't mean we shouldn't pay taxes.
I also believe that the sales tax is a good method for collecting some of the taxes we need to pay for the government we need; income tax is also a good tax for collecting a part of that money.
Unless you think we'd be OK without police, without a court system, without a structure to enforce the rights you have to your own property, without a military, without the ability to enter into treaties with other countries, you have to accept that there WILL be taxes. And if we are going to pay taxes, I want it to be as easy as possible. The pain is not in the PROCESS of paying taxes, it is in the dollars you see leaving your pocket.
With the sales tax, you see the money go away every time you buy something. That's not hidden, like the gasoline tax where they won't even display the taxes you paid when you filled up.
I appreciate this discussion, we agree on more than we disagree, and mostly a matter of emphasis.
Putting on my thinking cap (tm), it appears most revolutions, large and small, violent and non violent have begun over an issue of taxes. There may be other related issues, but the focal point has been taxes.
The Boston tea party didn’t start with the tea in the water. It was an isolated incident with a lot of incidents prior to it and after it that we don’t think about.
There were many other taxes and regulations the colonists accepted, but for some reason the tea tax stuck in their craw, maybe because they drank tea every day and maybe the way the tax was assessed but it was in their face. My history memory of this is that (I am willing to be corrected) people avoided the tax (they were dishonest) and refused to pay it. They started drinking coffee as their personal rebellion? Coffee did not come on British ship but maybe other ships so couldn’t be regulated. As the tax revenue dropped the British became more forceful in their collection of taxes, stopping other ships with coffee from trading. Making examples of those that did not pay the tax by destroying their business. They probably had posters/propaganda such as “This establishment supports the King, drink more tea.”
My point being that the people are not accepting this use tax as evidenced by comments in this thread. Revolution starts with not paying the tax. It may be a lawful tax (they all are).
Revolutions start with not paying taxes (intentional repetition). This use tax may be the straw for a lot of people. It may be the moment of history remembered for the revolution? It may depend on how burdensome the tax collection is.
My own prediction of this and I have posted before: The federal government is now receiving all your bank information and credit card information (obamas health care bill). This information will be shared with the states. A computer will sort through all this information and you will receive a bill itemizing all your out of state purchases with penalties and interest added on. A note will be attached stating if you don’t pay, a lien will be put on your property. If you don’t have anything, you will ignore it, if your do have something it will be taken away from you for the common good.
Not paying this tax is the only personal rebellion for many. It is not an issue of honesty and fairness as you project but it is an issue of liberty and freedom which trumps the other issues in my opinion.
I just don’t think that most people are “refusing to pay the use tax”, or that they are doing so in an act of rebellion. Most people simply don’t know it exists, and can’t be bothered to find out if they actually owe more money. And those that do know about it are mostly ignoring it because they CAN.
I think we are at a state where people feel like the law is what they can be FORCED to do, not what they feel morally obligated to follow. OK, that is too black-and-white; people don’t murder because they know it is wrong, for example, not simply because they are afraid of getting caught.
But look at a typical riot. A mass of people get together, and suddenly they are burning cars, smashing windows, beating people up, and looting stores. Why? Is it because they are rebelling against stupid laws that don’t allow them to burn cars? Is it because they are compelled by circumstance?
I don’t think so. I think it’s that they can get away with it. This is a depressing thought, because it suggests that there are a good number of people out there who only “behave” because they are afraid of getting caught, and that when they learn we don’t have enough police, they will simply break the law.
Most all of us break the speed limit, at least on superhighways. We wouldn’t if we were guaranteed to get caught, but we know we get away with it, and we mostly disrespect the limit anyway (especially since the federal government imposed 55 mph for totally non-safety purposes, thus removing the moral imperative many people felt to “keep safe”).
I’m not saying it is a slippery slope from there on. But at some point, it seems we did drop over the precipice. I think if the feds didn’t have their own copy of most of our transactions, a sizable minority would refuse to pay any income tax. I think if there was no sales tax collection, few people would file to pay it.
And I think if people could get away with stealing things from stores, millions would. And they’d justify it — “Well, the democrats tell us corporations are evil, and they make too much profit, and they are ripping us off; I’m just getting back what they stole from me in high prices”.
It has been that way in Tennessee from the beginning. It is called a use tax.
People can avoid it but a business can be audited and sent a bill for all, that is all, not only internet sales tax back 5 years.
On a general note. You are hanging your hat on law abiding and fairness, I understand. At what point does the govt become so oppressive that we refuse to follow the laws? This was a great debate for our founding fathers. King George represented Gods govt after all.
Through this conversation I have been thinking about revolutions. The French Revolution was a fight against what they didn't want. The American Revolution was a fight for something - freedom and liberty.
I think we will have a french revolution unless we “frame” it in the right way like our founding fathers did. But if I had to bet, it will be on a french revolution, any takers? Now you make me think further, if I really think a french style revolution is coming, what do I do? Preparation for an American style revolution is different.
Read the above again, just so you REALLY understand.
Just like seat belt laws are no longer about safety, they are about fines, so is this tax. The major source of revenue to make the tax collector look good is the penalty and interest and he wants to look GOOOOOOOOD to his supervisors.
Well folks, you are guilty before you got out of bed this morning. Decision time: protest by leaving it blank, Lie and put in zero, pay the tax, submit to your overlords, get involved to change things, start a revolution......................
Remember they have already calculated an amount you owe, you have to prove them wrong, they don't have to prove anything.
Makes me wonder if King Georges tax collectors imputed a tea tax even if you were drinking coffee..........
They must be joking. How many people hold onto their online receipts? No one is going to report those expenses and unless the state gets it from online retailers, good luck with collecting on the tax.
Google “shoebox” Paul Powell as an example.
They should change the name to “used” tax.
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