The controversy over Amazon being forced to charge sales tax now in California brings up an interesting question: do you personally pay Use Tax every year on your out-of-state Internet purchases?

In most states, taxpayers are only urged to pay, and enforcement is very minimal. Consequently, compliance is extremely low, and this forces many states to do as California did, force interstate merchandisers like Amazon to collect state tax on purchases.

 

Never even thought about it. The reason I often use Amazon or other companies that don't charge sales tax is to save the $, or maybe, more accurately, to spend less. Living in "Taxachusetts", I pay plenty of other taxes already.

(This info is dated as the tax is now 6.25%) A 5% Massachusetts use tax is due on your taxable purchases from out-of state or out-of-country businesses of tangible personal property for use in Massachusetts on which the Massachusetts sales or use tax on the items has not been paid. The use tax does not apply to out-of-state purchases that are exempt from the sales tax (for example, clothing that costs $175 or less) or food. Generally, anyone who pays a sales or use tax to another state or territory of the United States on tangible personal property to be used in Massachusetts is entitled to a credit against the Massachusetts use tax, up to 5%. This credit is allowed for sales or use tax paid to another state only if that state has a corresponding credit similar to the Massachusetts credit.

 

Why, of course. We all have FRS licenses too.

 

This is incorrect! FRS doesn't require a license, only GMRS channels.

 

Life could get interesting....not paying your sales tax here is a felony. They come and haul you away. It's not like your tax return.

I do both onsite and internet retailing. Computers give me the capacity to do multiple state collecting but the non standardization of state laws as they apply to clothing would be hard to keep up with. The costs of doing such for all 50 states would be considerable in software and labor. The only way I'd consider it is if I received a portion of the outstate collected tax to offset collection costs.

If they go after the end user, what are they going to do, seize credit card and bank card records?
I'd hate to see what my tax return would look like if I had to file in every state I did business and show who bought what when.

fltsfshr

 

I don't recall any line items on our state tax return asking if I had any out of state purchases on which I must pay sales tax.

Then again, I'm not looking for it either.

Obviously taxes due for business, sales tax or otherwise are submitted promptly. The boss prefers not to have the IRS or state revenue people giving us a call.

 

As a good resident of the fine state of Ohio of course I do!

 

Hey Lainey, I just looked it up on the Massachusetts Form 1 for residents, and the use tax is on Line 33. Here is what the line says: Use tax due on out-of-state purchases (from worksheet). If no use tax due enter “0” .

If you are interested, , you can read all of the instructions on the worksheet obtained on the Massachusetts Department of Revenue website.

(Just thought you would want to know for future reference for next year. )

P.S. I'm having trouble sleeping tonight, so I had nothing better to do than read up on Massachusetts Income Tax. )

 

Thanks for that info, Sue. I guess I'd better take more time preparing next year's return. I just ordered some kind of litter disposal system, from Amazon. No tax. I'll be sure to report that!!

 

California has a line on the income tax forms to pay taxes on purchases you made on the internet. I have never had a client give me anything to report on that line, so my vote represents hundreds of NO votes.

A few years ago California sent out notices to all businesses that had revenues exceeding 100,000 that didn't have a sales tax number. They demanded that all of them register their business and file three years of back tax returns. These businesses included doctors, lawyers,accountants and others that don't sell a product. If you had nothing to report, you had to register anyway. They were, of course, looking for the tax on purchases made by the businesses from out of state or over the internet. I can't think of any federal or state forms that must be filed if you aren't liable, don't belong to a particular filing class, or haven't filed before.