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Tuesday, October 30, 2012

How states can improve sales and use tax collection

Line 95 is the use tax line on the California personal income tax form. Line 22 is from the Michigan form.
Which do you think better explains what the line is for?
As I've noted in the blog a few times, there are ways that states can improve sales and use tax collection (beyond waiting for Congress to allow them to collect from some remote vendors). I have a short article in the AICPA Corporate Taxation Insider (10/25/12) that provides some legislative and administrative actions states might consider. Here is one suggestion:
  • Allow state agencies to purchase only from vendors that are registered to collect sales tax.
I also suggest that when there is a line on the state's personal income tax form for paying use tax, that they be sure it is clear what the line is for (see the example lines above; see article for larger picture). Please take a look.

What do you think?

1 comment:

Accountancy Marketing said...

I think this is a very effective suggestion. In this way states can improve use tax collection.