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Saturday, September 8, 2012

Sales and Use Tax Collection Issues

A recent article (9/1/12) in a Tennessee paper - "Politicians among online tax scofflaws - Amazon shoppers supposed to voluntarily pay use tax," by Josh Brown, notes that some politicians had not paid their use tax. Namely, some campaigns, although the article notes that it has since been paid.

I am not surprised.  I am surprised though about states allowing state agencies to make purchases from vendors who do not collect sales tax.  These agencies might not have systems in place to be sure the use tax is paid. How do they identify which invoices did not have sales tax included? What about employee reimbursements?

I've got a few pieces on the Scholastic Book Clubs case (see here and here). Schools need money, consumers do a poor job of self-assessing and paying use tax, most cities have bookstores or Internet vendors who collect sales tax, so, why do the schools allow the teachers to hand out the Scholastic order forms during work hours? Could the legislator pass a law saying the schools may only do it if they collect the use tax on the orders?  This is likely just one example.  

Query - how much do states and their agencies and local governments spend on purchases from vendors who do not collect sales tax?  For such sales, for what percentage is the use tax paid?

What do you think?

1 comment:

Kenneth Decker said...

Good article, the authors continue to write a better article!

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