So used

What a surprise this isn’t:

An increasing number of politicians, concerned with shrinking budgets and eyeing continuing growth in e-commerce, want to force out-of-state retailers like Amazon.com, Overstock.com, and Blue Nile to tattle to tax collectors about how much in sales taxes their customers have avoided paying.

Colorado recently adopted such a measure, which says retailers must divulge the total purchases “made by each Colorado purchaser during the prior calendar year”; they also must forward a more detailed list to every customer accompanied by a warning that paying use taxes is mandatory. A similar proposal in the California legislature will be the subject of a hearing next week, and a Tennessee bill is scheduled for discussion.

Meanwhile, Oklahoma has already come up with a relatively-unobtrusive approach, which has been detailed in the 511 packet for the last few years. If you can document every last out-of-state purchase, there’s a worksheet for that; if you can’t, you’re allowed a guesstimate of 0.056 percent of your adjusted gross income.

There is, however, a quirk in the Oklahoma law: if you overpaid last year and got a refund, your subsequent 1099-G will be adjusted by the amount of use tax you reported. I have never quite understood this.

And there remains Quill Corp. v. North Dakota, which does not address the question of whether this tax is owed, but which does declare that it’s not the obligation of the vendor to collect it on behalf of a state.







5 comments

  1. fillyjonk »

    15 April 2010 · 7:25 am

    I wonder if there is anyone who documents every single out-of-state purchase. I suppose for someone living in the “middle” of the state, who does not travel, and does not order from catalogs/internet, it might be cheaper but wow, what a hassle.

    As I’m one of those evil ‘retail leakers’ who often goes to Texas or elsewhere to shop, I figure the “use tax” means I’m getting off cheaply.

  2. ms7168 »

    15 April 2010 · 10:41 am

    I noticed that most of the tax preparation websites were simply placing a “0” for the use tax. A -few- now have started allowing you to place a figure in there if you wish.

  3. Gabrielle Dolly »

    16 April 2010 · 9:35 am

    ::sigh:: I s’pose it needs t’ be said. Article 1, Section 9 of the Federal Constitution says (in part) “No tax or duty shall be laid on any goods exported from any state.”

    Now, folks’ll nitpick that the part o’ th’ Con that’s from is th’ Congress part. Well, yes. But it doesn’t say, “Congress shall make no law…” It says flatly that that kind of impost is forbidden. Which means to this strawberry blonde laywoman that that means EV’ry body. Including greedy, grabby state legislatures.

    ‘N’ if ya ‘members yer history, that’s right — it was put in t’ pr’vent what happened under the Articles of Confederation, when there were trade wars between the states.

    Ya, ya, ya. Old story. Dun’t matter. Gonna keep sayin’ it ’til the gummint gets the frickin’ message.

    GFD

  4. McGehee »

    16 April 2010 · 10:12 am

    Article 1, Section 9 of the Federal Constitution says (in part) “No tax or duty shall be laid on any goods exported from any state.”

    Now, folks’ll nitpick that the part o’ th’ Con that’s from is th’ Congress part. Well, yes. But it doesn’t say, “Congress shall make no law…”

    As a matter of fact, it’s unlikely Congress would be the one to lay such taxes or duties on the exports of any state. At the time of the Constitutional Convention, states were doing that to each other.

    A proper reading of that provision, then, is precisely as Gabrielle understands it — and as a bonus, its existence argues against the current expansive interpretation of the Commerce Clause, since said interpretation makes Art. I Sec. 9 superfluous.

  5. Dick Stanley »

    20 April 2010 · 12:24 pm

    Our halfwit legislators don’t even bother to read their bills before voting on them. How can you expect them to read the Constitution? Besides, they’re always looking for a new way to be intrusive, especially when it comes to new tax revenue they can hand out to their pals.

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