Sales tax on out of state purchases

[Boyd Ostroff]

OK, this is not about DV, but is related to purchasing things online from out of state. Much to my amazement, my state (New Jersey) has added a new item to the state income tax form. They ask you to declare all items bought outside the state for which no other state tax was paid, then you are instructed to pay 6% NJ sales tax. This is followed by an admonishment that they will find you and come after you if fail to comply.

Wow. Are other states adopting such a policy?

[Brian Wood]

I believe Michigan has the same type of policy. I dont know how many people will follow it because I doubt there is really anyone following up on an entire populations internet purchases.

[Dan Brown]

Well, since Texas has not personal income tax, I don't expect we will see this new line item ;^)

[Ted Springer]

How can they chase you down and find you? Can the government really afford to keep track of all that? No way. I think the admonishment is put there just so they strike fear into some people so they will pay. I'm pretty sure they don't expect everyone to abide by it, but fear can usually work pretty well and the state sees it as better than getting nothing at all.

[Matthew Groff]

Actually, this is probably something you should have been paying already. I believe it's called a use tax. It's been around for quite some time, but most people either ignore it or don't know about it.



mg

[Nicholi Brossia]

Oklahoma does this too. I bought a nice G4, Canon GL2, and accessories last year and almost dropped a load when I calculated the 7% use tax. I did go ahead and pay it considering I'm just starting my business, but asked around about it. Apparently its been in effect for quite some time here, but most people choose to ignore it. Generally ignoring it has been safe because not paying is only exposed after an audit. However, with internet shopping becoming more and more popular, I'm sure they'll start cracking down on it, trying to get their fingers in the pot any way they can.

[Boyd Ostroff]

I wonder if this will spawn sort of an unholy alliance wherein the state pays mail order vendors for their client lists? It would be a big job to go after everyone who makes an internet purchase, but most states are really hurting for money and I woudln't put it past them. However this seems like a really unpopular thing that would generate a strong reaction from the public if it were truly enforced.

[Rick Bravo]

Buy online from an out-of-state vendor...no sales tax!

RB

[Matthew Groff]

Rick,

You are incorrect. Florida has a use tax. Of course there is no sales tax, but you are still exposing yourself to trouble in a potential audit.


mg

[Rick Bravo]

Ovarb Kcir!

My new alias so that the tax police doesn't get me for not paying that $3.95 in tax for my imported Giordano's Pizza from Chicago!!!

I stand corrected.

RB

[Don Parrish]

Dont forget that if you purchased this with company money that you claimed it on your business taxes and probably list the item as equipment on your tangible taxes as well, so it is recorded !!

[Jeff Donald]

Many states have reciprocal agreements with neighboring states, whereby they report to the proper state agencies the sales made across state lines. This type of arrangement is mostly made to track large ticket items (such as auto sales) across state lines. However, the states have the authority ( in most cases) to subpoena records etc. to force compliance. The threat makes most merchants comply.