Illinois : Pay us taxes on every purchase you've made online since 2004...seriously

Those people are insane... but it's Illinois... oh wait...Obama comes from Illinois... uh oh.

State wants Illinoisans to pay web taxes

Many Illinois taxpayers are dodging state and local sales taxes by buying Christmas gifts online, but the state hopes to get them to eventually pay those taxes in 2011.

The state will offer a sales tax amnesty from Jan. 1 through Oct. 15. Under legislation passed last year and signed by Gov. Pat Quinn, people who bought goods online, through the mail or over the phone and didn't pay sales tax on them between June 20, 2004 and the end of 2010 can pay what they owe without penalty during that period.

And they are serious? Those people are NUTS.

So... if people don't pay, which many WON'T... will they start arresting them? This thing cannot be constitutional... TAXING RETRO-ACTIVELY? This ain't freaking constitutional.

Under a 1992 U.S. Supreme Court decision, a state cannot require retailers without a physical presence in the state to assess sales taxes on purchases. Congress has also declined to pass laws requiring that the taxes be collected.

See? It's not even constitutional to require taxes on retailers outside the state... retro-active taxes on that would be DOUBLE-unconstitutional...

reply to post by Vitchilo


um.. seriously.. how would they know that you bought anything online if the company you bought it from is not physically in the state? This is just weird.

Isn't it up to the merchants to collect sales tax, and NOT the customer's responsibility?

Most online retailers already charge a sales tax for in-states sales. One of the reasons so many online and mail order shops incorporate in Nevada or Delaware (they don't charge a sales tax).

Sounds like Illinois is about to engage in some serious idiocy.

I love this line.

The state will offer a sales tax amnesty from Jan. 1 through Oct. 15. Under legislation passed last year and signed by Gov. Pat Quinn, people who bought goods online, through the mail or over the phone and didn't pay sales tax on them between June 20, 2004 and the end of 2010 can pay what they owe without penalty during that period.

This legislation was passed LAST YEAR.
Where were the residents when this took place and why didn't the act upon it?

"It will cause people to think about it. We know that most people, if they know they're required to pay taxes, will, in fact, pay what they owe if they see it on their tax return," Hofer said. "Are we going to collect all of it? No."
Vite said the Department of Revenue's new policies are "innovative," but wasn't convinced they will increase compliance drastically.
"It'll raise some revenue," Vite said. "Not much, but it'll raise some."

This worries me.
Almost like they just want people to hand over more of their money out of guilt.
Like they will get in trouble if they don't pay the back taxes.
What?

It's all about collecting more or the money that THEY have overspent to begin with.
We all know that even the collected money will just pay for more salaries and less street repairs.

I live in Illinois, and I have not seen anything about this anywhere...not on the news, not the news paper, not anywhere.

Looks like to me just some more secret legislation to pad the pockets of those most fortunate.

Originally posted by Vitchilo
Those people are insane... but it's Illinois... oh wait...Obama comes from Illinois... uh oh.

State wants Illinoisans to pay web taxes

Many Illinois taxpayers are dodging state and local sales taxes by buying Christmas gifts online, but the state hopes to get them to eventually pay those taxes in 2011.

The state will offer a sales tax amnesty from Jan. 1 through Oct. 15. Under legislation passed last year and signed by Gov. Pat Quinn, people who bought goods online, through the mail or over the phone and didn't pay sales tax on them between June 20, 2004 and the end of 2010 can pay what they owe without penalty during that period.

And they are serious?

Those people are NUTS.

So... if people don't pay, which many WON'T... will they start arresting them? This thing cannot be constitutional... TAXING RETRO-ACTIVELY? This ain't freaking constitutional.

Under a 1992 U.S. Supreme Court decision, a state cannot require retailers without a physical presence in the state to assess sales taxes on purchases. Congress has also declined to pass laws requiring that the taxes be collected.

See? It's not even constitutional to require taxes on retailers outside the state... retro-active taxes on that would be DOUBLE-unconstitutional...

edit on 13-12-2010 by Vitchilo because: (no reason given)

This is just a Supreme court ruling. This has nothing to do with the Constitution.
But I agree with the ruling completely.

This is not so far fetched and already happened to a friend in New Jersey over cigarette purchases. Several years ago, when NJ began charging outrageous fees for cigarettes he began ordering online. It took 3 years for the state to catch up to him. But they sent him a bill -- somewhere in the ballpark of $2000 not including penalties [it was the difference then between paying $6.25 per pack versus the $3.75 online over a three-year period] -- he tried to fight it, but lost. Big time. The reason, not in the legal terms, was because you as a resident are required to pay all taxes due from the state you live in regardless of the tax laws where you bought the product. It is the responsibility of the taxpayer (i.e. customer) to know what taxes are due your state.

If you think it through, it stinks but makes sense. The problem is when you order online there is always a paper trail. Whereas if you travel state lines and pay cash -- no paper trail. Theoretically though you are still responsible for the taxes. The only difference is the state can't really catch you that way since we can travel between states without any documentation or proof of travel.

Think of gun laws. If you buy a gun out of state and bring it to your state of residence, you are required to register that gun (and pay any fees necessary to do so) according to your state laws....not the laws of the state where you bought it.

It's only taken this long for states to figure out how to track this stuff -- not that this is anything new.

It's been part of the Indiana income tax filing for as long as I can remember. I estimate and pay mine every tax time. It's a pain, but all taxes are.

Originally posted by rogerstigers
reply to post by Vitchilo

 

um.. seriously.. how would they know that you bought anything online if the company you bought it from is not physically in the state? This is just weird.

Hmm they could ask for your internet records from your ISP... but of course any sane judge would refuse the warrant to do that.

Illinois is insane and all the laws are against their BS scheme.

reply to post by lpowell0627


Well your friend got screwed..

Under a 1992 U.S. Supreme Court decision, a state cannot require retailers without a physical presence in the state to assess sales taxes on purchases. Congress has also declined to pass laws requiring that the taxes be collected.

So yeah... his lawyer screwed him.


EDIT : Apparently, it's about a USE tax... not a sale tax...

Unlike the sales tax, the use tax is imposed directly upon the person that stores, uses, or consumes tangible personal property. Use tax does not apply if the purchase is from the state you're in... and is subject to the state sales tax.

The state cannot require out-of-state companies that do not have nexus or a "direct connection" with the state to collect and remit use tax. If an out-of -state seller does not collect use tax from the purchaser, the purchaser is responsible for remitting the use tax to state he's in.

The ruling says the company cannot be coerced into collecting, but says nothing at all about the state collecting. My state has a "sales tax" for purchases within the state and from those companies that have a physical presence in the satte and a "Use tax," the equivalent to the sales tax, for purchases outside the state. They have ALWAYS maintained the right ot the tax and have enforced it for cars & guns, because they have to be registered in the state or pass through a state system. It's just that as a practical matter, it would be difficult for the state to collect. Even records of Internet use do not say whether you purchased something. A second bigger problem is that sales tax rates vary by municipality where there are sometimes dozens of different tax rates depending on where you live in a single county. The database containing all this information would be huge and ever-changing--but not exactly impossible.

However, there is no doubt states "lose" millions in tax revenue by not collecting the use tax. The growth of the Internet has exacerbated this. Now enter evil computer empire and you see that the technical barriers to collection may be evaporating. I guarantee you the states will attempt to collect. The question is, will people force their states to repeal such legislation, or will they roll over and die?

This would sure be a double tax.

When taxes are taken from online purchases of goods a sales tax is supposed to already added to the price. The sales tax is from the state in which the product's business is in not the state the purchaser is in.

Why are is the state going after the consumer and not the producers?

I am a website developer and have done quite a few "shopping carts", including some in Illinois.

States are getting desperate.

When are people going to wake up!

There otta be a law banning these nebulous taxes...There is a lmit to what anyone reasonable person could consider taxability.
The states trying to collect taxes on business that citizens do outside the state are overstepping their moral right to collect such duties, which is what they are.
The States united to free citizens from such odious duties.If a state wants to tax people for out of state purchases, the demand for such fees is unconstitutional.

Originally posted by lpowell0627
The reason, not in the legal terms, was because you as a resident are required to pay all taxes due from the state you live in regardless of the tax laws where you bought the product. It is the responsibility of the taxpayer (i.e. customer) to know what taxes are due your state.

Think of gun laws. If you buy a gun out of state and bring it to your state of residence, you are required to register that gun (and pay any fees necessary to do so) according to your state laws....not the laws of the state where you bought it.

It's only taken this long for states to figure out how to track this stuff -- not that this is anything new.

It's only taken this long for the cash strapped states to figure out how to squeeze more cash from the consumer.
I can slightly understand but don't agree with why the state would do this for purchases that are shipped to my state but think of the following:
If I live in State A that charges 6 percent and I go to State B that charges 3 percent why should my dollar be taxed twice? Also what if I am purchasing it entirely outside of my state. The physicality of the purchase is outside of the boarders of my state of residence. But at the same time the transaction may be from inside of my place of residence inside my state of residence.

With that said does this mean that if I were to go to France or England and make a purchase of anything should I be paying my state tax as well as the tax of the physical place I made the purchase even if it's out of the country? So if I transport a purchase across state lines to where I am a resident does that mean that the taxes automatically apply? What if I rented a moving van and took everything out of it's packaging. Are they going to check that too? Are they going to scrutinize my credit card bills? Are they going to enter my home to look for that purchase?

The states need to look long and hard at their budgets and rethink their economics and learn how to live on less just like all of their residents.

Okay, hypothetical:

What if the purchase is made online via an Internet Service Provider (ISP) that doesn't reside in Illinois, or redirects elsewhere?

What if the purchase was made on an account when said person was not in Illinois at time of said purchase?

What if it's not shipped to Illinois, and/or not purchased while in Illinois?

Shall this be the "ghost tax"?

--

How is this even legal, and how is this seriously even going to work? I assume this will be completely voluntary, and that anyone obliged enough to pay forward, will declare their purchases willingly. Because frankly, there is no way they can record purchases made since 2004.

They would need to create more legislation that would force online consumers to pigeonhole through a third-party service that records their transactions. A huge hassle, breach of privacy and seriously asking for an intense amount of fraud. Even so, they cannot go back in time and record purchases made in the past. Which makes the entire legislation complete BS.

If anyone ever arrived at my door, asking information about purchases made online, I would seriously consider throwing dog # in their face.

I mean seriously, if you purchase something online from a company that is out-of-state or even out-of-country, then how could the state legally tax you on something that, A: Doesn't need to be registered via the state, B: Isn't manufacture or sold in the state. and C: Can't be proven beyond any doubt that it was even purchased to begin with.

It's up to the merchant to collect state sales tax, not the customer. Besides, in trying to collect all that and do it accurately, they'll spend more money than they'll make.

What else could be expected out of the most criminally corrupt and idiotic state government in the entire nation?

It's a damn shame too, Illinois is an awesome state, but the numerous morons in elected office there make it unlivable.

Originally posted by thewholepictureThis would sure be a double tax.

No, it is not. There is only a single tax that is at stake here.

When taxes are taken from online purchases of goods a sales tax is supposed to already added to the price. The sales tax is from the state in which the product's business is in not the state the purchaser is in.

No, it is not. Out of state purchasers are exempt from in-state sales taxes. That's the whole issue here.

Why are is the state going after the consumer and not the producers?

Because it is the consumer who owes the taxes. The producers (you mean retailers) are required to collect the taxes on behalf of the state, but states other than the one you are in can't legally get at the retailers--yet.

When are people going to wake up!

Unfortunately, it is the states that have awakened here. There's plenty of precedent as to the legality of it. I'm sure some web developer will eventually develop a shopping cart that contains a nationwide database of tax rates, and the rest will be history.

Now don't anybody accuse me of WANTING this to happen. It would be the absolute pits and I hope it does not.

Originally posted by BigTimeCheater
What else could be expected out of the most criminally corrupt and idiotic state government in the entire nation?

It's a damn shame too, Illinois is an awesome state, but the numerous morons in elected office there make it unlivable.

Yeah, but the people there keep voting for these idiots...

It's like they're gluttons for punishment..


This is why politicians in state governments as well as federal government should be required to fully disclose any tax plan, who wrote it, and for what purpose to the people before voting on and implementing such a tax. In Nevada we vote on most taxes. 9 times out of ten we vote down taxes...Why? Because our government is small and they STILL waste money like you wouldn't believe.

reply to post by Vitchilo


It used to be only if the company of origin was in the state did you have to pay state taxes..

In the last 5 years most states have started ignoring that rule, and suddenly states with no online tax had one, and those that had them now charge for every purchase. Here in Washington it doesn't matter where I buy, the law says anything SHIPPED gets taxed. If I go to Oregon and buy something in an actual store I pay no taxes.. If I buy, say, a washing machine and have it delivered to my home in Washington ... I pay taxes.

Personally I don't mind sales tax so long as I don't pay income tax.. but I pay both..