In the 6/29/00 issue of the Wall Street Journal, specifically a lengthy article on the
revival of legislation dealing with internet taxation, the following comment was made:
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Everyone knows how sales taxes work, but few people realize that they are supposed to
pay that same tax to their state government every time they buy a product outside the
state's borders. This is called a "use tax." For instance, if a person lives in New
York and buys a stereo system in Connecticut -- either via the Internet or by mail --
he or she is required to keep the receipt and pay the home-state tax at year's end.
Most states provide a line on annual tax forms to remit the tax. Few people pay this
use tax, though, because most don't understand it, aren't aware it exists, or know
states can't really enforce it. Most states don't bother to crack down, but this tax
loophole could become a major problem as Internet sales proliferate.
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I feel like I’m the last person on the planet who’s heard of this tax. Wow! This is
my favorite type of tax wedge – the “imaginary tax wedge” However, I feel like I’ve
been depriving my local Statehouse of its fair share of tax dollars. I implore all
list members to reopen their files for the last three tax years, compute their
respective shortfall, and then pay the amount with interest and penalty. If our
local governments can’t count on the Armchair List members to do the right thing, then
how can they expect the same from the rest of the citizenry? Lead on. I’ll be right
behind you.
New York, NY
