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

Unenforced laws become unenforcable. the fact that the state has allowed this to go on for so long means that they will have to craft new legislation to address this issue. It will not stand up to court challenge.

Have you folks in Illinois lost your mind? I swear, it is like watching the saga of California unfold in the 70's and 80's.

reply to post by js331975


Yes, you are required to pay taxes on out-of-country purchases as well. Hence the Duty-free shops in airports and why they are so popular. This is also why there are customs limits in place on certain things you can bring back, etc. Can't have people saving money by buying abroad now can we !?

Originally posted by Rockpuck
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..

That has never been the case in Washington. The Sales Tax/Use Tax has been in place for decades. It has not been enforced because it was technically difficult. I know of no one in Washington State who actually gets the form quarterly and painstakingly fills out every out-of-state purchase and sends in the appropriate amount. Perhaps a few businesses do because they have to fill out the form anyway and if they want to stay 100% legit, they may do it.

If I buy a washing machine from a company in Utah that has no physical presence in Washington, that comoany does not charge me Washington State sales tax, even though it ships the product to me in Washington. It may very well have records of the sale, but it does not inform the State that they just shipped me a washing machine. A resident of Washington is SUPPOSED to pay the Use Tax, but nobody does.

Washington State has no income tax at all, so Washington residents only pay income tax at a federal level and sales tax at a state level. You, however, appear to reside in Washington, but work in Portland, so the state income tax you are paying is for Oregon.

California and the IRS attempted something like this betwen 04 - 06 during the rise of eBay and it failed citing that it would be detrimental to those buying and you really can't demand that anyone pay $1.50 on a $4 bill of sale in taxes.

Yes, it is up the responsibility of the individual merchant to collect sales taxes on behalf of a state.

reply to post by schuyler


Of course "nobody" does it. However, it remains legal for states to collect this tax. The only thing is for states to be able to access the net's database of shopping records efficiently. Once that's done, we will all be getting a "tax due" bill.

Again, I would argue that this is nothing new and will spread like wildfire throughout all the states as soon as an efficient method to obtaining this data is found. Heck, even if they don't find an efficient method, the governments are likely to charge us the costs associated with collecting this tax.... New Jersey already does this.

For example, I received [in error] an overdue state tax bill from 2005. Included with the bill was a charge of $485.00 for "collection efforts". This was on top of penalties and fees and interest for not having paid on time. Now, the bill I received was their error since I was paid in full, however, had I not been I would have been subject to the collection fee charge. My guess is that any amount of money (or pretend money) that the states spend trying to figure out whether or not residents owe them any taxes from Internet purchases will simply be passed onto the taxpayer added into their tax due bill.

Simply put -- the fee for them having to chase you down instead of just paying it upfront.

reply to post by TheImmaculateD1


the eBay argument was different. I don't have the time to source everything right now, but I believe the difference was individuals selling things [which you don't have to declare as income as long as the total sold for the year does not exceed the government's limit] versus companies.

So, as far as the Internet goes, Craigslist and eBay type sites will probably remain exempt so long as the seller is an individual and not a company. Again, there is a threshold of sales that determines this.

But other stores online -- such as your smaller online-only stores -- that are out of your state and do not charge you tax at the time of purchase -- these purchases will be subject to back-taxes if the buyer failed to remit a sales/use tax to their particular state.

reply to post by schuyler


In Washington there are partner states with the sales tax.. in my case, I live close to Oregon, and I'll go to Oregon to shop for expensive items to avoid the sales tax. However, if I buy something as I said big that I cannot carry by my self (like a fridge.. a washer.. furniture etc) if I have the company deliver it I will pay sales tax to the store.. no forms required, the state automatically collects taxes on Washington's behalf.

Anything ordered online will automatically have a sales tax generated .. so if I go to Amazon and buy something based in New Hampshire I will pay Washington sales tax.

However if someone from Oregon goes to Washington to buy something they can show their ID .. any state not paying Sales Tax can show their ID and the tax is exempt.

However If I live in Washington (like I do) and work in Oregon (like I do) I have to pay Washington Sales and Property taxes (as well as the slew of other oddball taxes) but I also have to pay Oregon income tax (which is thousands of dollars a year) ... there is no way to get it back.

Tax codes all over the country are so complex, crude and in some cases stupid that it's hardly surprising to see one state having issues collecting.. but believe me, at some point someone will catch every penny you owe.

Originally posted by lpowell0627
reply to post by schuyler

 

Of course "nobody" does it. However, it remains legal for states to collect this tax. The only thing is for states to be able to access the net's database of shopping records efficiently. Once that's done, we will all be getting a "tax due" bill.

I believe that's exactly what I said. Thank you for repeating it, but I don't understand your "of course" tone. But the fact is there is no "internet database" of shopping records. If the records exist at all they are in tens of thousands of companies' individual databases on their own internal servers. They aren't compatible with each other, by and large, and are certainly not easily accessible by states. If this were to be practical, companies themselves would be compelled to do the dirty work here. It would be a paperwork nightmare.

If people want to protect themselves against such an onslaught, I would suggest people compel companies to erase purchase records as soon as is possible. Some companies keep a record of your purchases indefinitely, such as amazon, for example. Amazon is not the kind of company you want to do business with if you are worried about this.

reply to post by TheImmaculateD1

A few California business owners said they're getting notices to self-audit unpaid online taxes for the last 3-4 years. Or get audited. Apparently California want to expand this to the rest next year.