money.cnn.com/2004/02/09/pf/taxes/nys_sales_tax/index.htm?cnn=yes
NEW YORK CNN/Money - If you order something on the Internet, you probably have to pay shipping costs. And in some states, youll soon be getting a little reminder of that fact. You could be forgiven - by us, anyway - for not realizing that youre supposed pay your home states sales taxes on all purchases, regardless of whether theyre made from stores in your own state or in another state. When you buy something in your own state, the store selling it is required by law to collect sales tax, if the state has one. Five states do not, according to John Logan, a senior analyst for tax-information company CCH. If youre buying from a vendor that doesnt do any business from a physical location in your state, however, that store isnt required to collect state taxes. Theres an independent obligation on the part of the purchaser, said David Bunning, a New York City attorney with the firm of Greenberg Traurig. On the move Until now, state tax authorities have generally not tracked down and prosecuted those who violate sales tax laws, with the exception of major scofflaws like Tycos Dennis Kozlowski. His failure to pay sales tax on large amounts of expensive art work landed him in court. We focus our efforts on that small percentage who are dishonest, said Mark Bucci, a spokesperson for the New York State Department of Taxation and Finance. Now, however, New York and a number of other states are devoting a bit more effort to collecting sales tax from ordinary citizens as well as fallen fat cats. The tool is subtle but effective: a single line added to state income tax forms. Last year in Albany, the state legislature forced tax collectors to get out their big stick, said Bucci. The legislature required a line - line 56, to be precise - to be added to state income tax forms, on which a tax filer is required to enter the amount of sales tax owed on out-of-state purchases. George Pataki tried to block the rule but the legislature overrode his veto. Tax collectors in California have been trying to get something similar going since the 1990s, said Victor Anderson, a supervisor in the audit support unit in Californias Board of Equalization. It was difficult to implement there, he said, because sales taxes and income taxes are collected by different departments. Beginning this year, however, California tax returns will include a sales tax line, which the state estimates will yield an additional $13 million in collections. New Yorks budget office is figuring a $25 million take from the new line, though the Albany legislature was expecting 10 times more. So far, 21 states collect sales tax as part of the income tax filing process, according to Logan. According to a report compiled by the California Board of Equalization, just 058 percent of filers have paid the tax in Utah in 2001 and as many 16 percent in Michigan. But such relatively small amounts of money may not really be the point. The idea is just to remind taxpayers that they have that obligation, Logan said. What you need to do Realizing that New Yorkers may not have kept all their out-of-state receipts, the states tax form includes an option for estimating the use tax. Technically, its called a use tax when its paid after-the-fact by consumers. Instructions for the tax forms include a table of AGI ranges and, for each range, an amount that taxpayers can enter on the use tax line as an estimate. For example, if your AGI is between $75,000 and 100,000, youd enter $43. Thats what a New York City resident would pay in sales taxes on purchases of about $500. If a resident decides it would be better to be more specific, he can add up all the purchases made out of state, as well as from any localities within the state that have a lower sales tax rate than where he lives. Then, he can figure out what the New York sales tax would have been on those purchases.
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