The Finch Formerly Known As Gold

24 November 2007

The tax man backeth off

New York Governor Eliot Spitzer has temporarily abandoned a scheme to charge sales tax on online retail transactions by New York customers, which the New York Sun dubbed the "Amazon Tax"; one Republican senator, questioning the timing, called it the "Grinch Tax."

The speedy turnabout suggests that the headline-hungry Spitzer, at bottom, might still be in possession of a clue or two. I can't say the same for his budget director, though. Paul Francis, trying to explain why the move was so not a tax increase, came up with this:

I don't regard it as a tax increase. It's only a tax increase to the person who is paying it.

Emphasis added. And that stuff that makes the clouds move around? It's not actually air until you breathe it.

For the curious: Oklahoma has a "use tax" which applies to online purchases; however, the storefronts don't have to collect it on behalf of the state. (You're supposed to pay it yourself on Form 511.) This is marginally less heinous, because, unlike the Spitzer plan, it imposes no additional burden on retailers.

(Via Kirsten Mortensen.)

Posted at 9:26 AM to Say What?

I've often wondered about the "use tax":

1. Is there anyone who is able to document well enough that they bought EVERYTHING they used in the past year in-state, and therefore not subject to what would amount to double taxation?


2. How badly would they come after someone if they happened to, ahem, forget to do that part of their tax return?


3. When did they institute this thing, anyway? I don't remember having to pay it my first few years here- did they just recently twig to the fact that lots of people (at least people close to the border) may be driving elsewhere where the sales tax is less (like on groceries)?

I mean, my attitude is this: my town doesn't have a decent bookstore. The easiest way for me to get the books I want is either to drive 'cross the border (where I pay sales tax on them) or order from Amazon or someplace.

I still consider the tax to be somewhat heinous. (However, given the amount of online ordering I do, I'm probably getting off cheaper than I would if the tax were levied per dollar actually spent.)

(Of course, I also consider the state sales tax on groceries heinous - I have never lived anywhere that did that other than here. Fine, fine - tax high fat or low-nutrient foods if you must, but it irks me to be paying 8.25% on spinach and skimmed milk.)

Posted by: fillyjonk at 6:00 PM on 25 November 2007

(1) I doubt it seriously.

(2) It's not a Major Enforcement issue, so far as I can tell.

(3) It's been on the books for about seventy years, long before Al Gore dug the trench for that first T1 line. The Tax Comm, noting that hardly anyone actually paid the darn thing, came up with an Alternative Minimum Use Tax, if you will, which is 0.056 percent (in 2006, anyway) of your Adjusted Gross Income; fill in that much (I think mine was $20) and you're presumably in the clear.

Posted by: CGHill at 6:13 PM on 25 November 2007