For myself, I want to pay my fair share, and to compensate the state for my shared responsibility for the deaths of Wordsworth and HMV and for the damage to other local retailers that used to provide sales tax income. Also, whatever good karma I have for not owning a car is compromised by my lack of thought regarding shipping origin of all the things that are delivered to our door because they are not easily transported in a backpack or carried on a bus. I see something I want on the screen, press a button, and it magically appears at our door. Often I am not even aware of delivery cost since we pay the flat yearly fee for “Amazon prime” shipping.
All in all I think there are good arguments why out-of-state purchases should be taxed, quite aside from the fact that the state needs the money.
On the other hand, I’m afraid I cannot make myself keep track of internet purchases, and to sort out which are taxable and which are not. For that matter, I can’t be bothered to do the taxes myself, which is why we (over)pay an accountant to take care of them. So I gave our accountant a good faith estimate of our smaller purchases and the exact amount on a >$1,000 furniture purchase. Today I opened up the tax returns that arrived for our signatures, and I see that he has left the “use tax” line blank. A simple mistake, do you suppose?
I’ll call to get it corrected tomorrow, and now that I have gone to the DOR site myself I see that there is a “Safe Harbor” method based on adjusted gross income for estimating use tax for purchases that are individually <$1,000. It is more straightforward than I thought to obey the law on this.
But I am feeling rather alone. Given that it is on a sort of honor system, I wonder how much use tax the DOR receives? Would there be general support among Democrats nationally to require internet vendors to report or collect tax on internet purchases? Somehow I doubt it.
The same number of people probably declare use tax as choose to pay the optional higher income tax rate. Hundreds. ie. not many.
<
p>But, the DOR does audit use tax.
<
p>It only goes after the big fishes right now, but I can see DOR going after smaller purchasers, just to make a point. DOR currently does obtain customer information from some of the large jewelry retailers (van Cleefs, Tiffany) right now for that very purpose.
<
p>That is, DOR if predisposed, could easily access shared information with, say New York or New Hampshire to obtain Massachusetts addressees/customers who have purchased electronics from any one of the large catalog stores in Manhanttan and send out letters with assessments including penalties.
<
p>
This would be a great way to phase in a federal sales tax. Instead of state versus federal, it could be internet versus physical, and the federal gov’t would get the internet share, even if the company is based in Massachusetts and the order is shipped to Massachusetts. If there was a federal 5% tax on internet sales, it would help local stores compete in every state and avoid the problem of forcing states to audit and collect taxes separately. It would also make it much easier on companies that currently have to compute different tax rates for every state where they have a physical presence and then remit their collections to each state. All that costs money (I made a living off programming that stuff for years) and is totally wasteful.
<
p>I say, let’s have a 5% federal tax on all internet purchases, which the federal gov’t keeps. I bet it would be a net positive for the states (even if Vertex goes out of business).
I see great needs on the level of cities and towns, though. If there were a federal internet sales tax, I’d like to see the funds immediately disbursed in an equitable way to the local level. For example, imagine distributing them directly to school systems, with funding directly proportional to the number of children served.
<
p>Well, I can dream, anyway.
State revenues would go up because local stores would attract more sales. And, earmarks just get evened out in the wash (as do bans on federal funds for specific things). If this particular thing generates more revenue for the federal gov’t, then they won’t need to borrow as much, and they’ll have more to fund things in the states.
<
p>i don’t like earmarking, its just for show and it can only wind up not not being the right amount. Besides, it’s all a “money go round” as the Style Council sang. (video and lyrics)