Pinging Martha or any other Minnesota Tax Experts.............

I got a letter from the Minnesota Revenue Dept. - They said that U.S. Customs had alerted them that I had been out of the country in 2003, 2004, and 2005 and had purchased items and brought them back into Minnesota. So they want to collect sales tax from me. Even though every time I was below the $400 exemption from the Federal Government.

So, I look at the form from them and it says that you don't have to fill it out if your Calendar year purchases were less than $770. But, you are also supposed to 'add' in the amounts of goods purchased in other states, over the internet also. They admit they cannot really track these purchases, but that I am supposed to know. - I have no fricken idea of what I've bought over the last 4 years.

Apparently Minnesota has hired a bunch of people in the last couple years to find tax money to support our wonderful GOP Governor's 'no new tax pledge'. So it seems that the state of Minnesota wants to start collecting for internet purchases from other States.

My questions to you are.

1.) have you had any experience dealing with this form?

2.) Do you personally keep track of all your expenditures of out of state purchases? I am a pretty detailed guy and track a lot of stuff in Quicken, but not that detailed!

3.) How would you handle this if you were me? ( am leaning toward the option (that was outlined) of returning the letter to them saying that my total out of state purchases for 2003, 2004, 2005 were less than $770, and I do not need to fill out a return.


[img width=571 height=750]http://img.photobucket.com/albums/v230/Cutthroat-trout/Misc%20Pics/UseTaxForm.jpg[/img]

[Martha]

Hum. So far I only have seen businesses get a similar form, but with no minimum. They are currently running a voluntary compliance form for businesses.

Our governor is shaking the tree.

If they do an audit they may want to see your credit card statements and check book records. Keep that in mind when you file it out. If you paid sales tax to another state, you shouldn't have to pay Minnesota use/sales tax. So there is a good chance you are below the $770 figure.

This was the proposed law with the $770 amount; it must have passed: http://www.taxes.state.mn.us/legal_p...s/sf1338_2.pdf

I am going to work tomorrow, I'll ask around.

[cute fuzzy bunny]

With red light cameras, a lot of towns use a "snitch ticket". They send you something that looks like a ticket, but theres no court information on it. In the 'ticket', they include a copy of the photo they took. They want you to send it back and tell them if the photo is of you, and if not, who it is. Failure to comply results in a suspended license with the DMV.

Only problem is, the police cant suspend your license without a court proceeding first, so thats what we in sales used to refer to as "a lie".

Their hope is that you will snitch on the driver, even if its you.

Many folks advise to throw 'snitch tickets' away, because 99% of the time, without your implicit agreement that you were driving, its too much trouble to identify vague photos in court. And 99% of people respond to the snitch ticket.

Its not advice, but unless I bought home a couple of thousand bucks worth of stuff and there was a paper trail that someone else could come up with that showed I bought a couple of thousand bucks worth of stuff, I'd circular file that snitch ticket...

[2B]

Texas actually has the same law. Every state probably has some version of collecting sales tax off of out of state purchases. The beauty is that there is no way for any state to track anyones purchases unless the merchant is in the state of the purchaser. Then sales tax is collected.

Personally, I never buy anything over the internet so I don't owe Texas any "lost" sales tax.

Thanks Martha!


CFB - The problem is of course is that there is a paper trail and this 'problem' will be coming to a state near you! All states are now having this problem as internet purchasing is increasing and states are looking for revenue.

So that States are now starting to cooperate and are sharing information. They can get records from businesses in their state and track shipment addresses to other states.

Now if my State sends me a bill based on their tracking ability, I have no problem sending them a check, however asking me for 3 years of 'back data' is more work than I am willing to put up with. I'm gonna plead stupid this time. But, I'm guessing that sales tax free shopping via the mail and internet will be history soon. The only sales tax free shopping in the future may be visiting Sales Tax Free states in person.

Originally Posted by 2B

Texas actually has the same law. Every state probably has some version of collecting sales tax off of out of state purchases. The beauty is that there is no way for any state to track anyones purchases unless the merchant is in the state of the purchaser. Then sales tax is collected.

Personally, I never buy anything over the internet so I don't owe Texas any "lost" sales tax.

Well, there is if you have the merchandise shipped to your home. If you buy the stuff in person you are paying that State's sales tax. The only way to avoid it as I see it, is to visit a Sales Tax Free state and make your purchases in person. (Or have someone else do it for you and ship it to you)

[Spanky]

I had to pay minnesota tax for purchasing a laptop from Dell.

Originally Posted by Spanky

I had to pay minnesota tax for purchasing a laptop from Dell.

Did Dell Collect it?

[2B]

Originally Posted by Cut-Throat

Did Dell Collect it?

I thought that was only a problem for us Texans -- since Dell is out of Austin. If they do business in your state (ie mall kiosks), they will have to collect sales tax.

Who keeps track of what they buy on the internet? If they send me a detailed bill, I might pay attention. It doesn't impact me since I never buy anything over the internet.

[Spanky]

Originally Posted by Cut-Throat

Did Dell Collect it?

It was charged to my credit card.

[Brat]

One of my neighbors is developing the tool to enable the sales tax collectors (state, county, city et all) to do the deed.* http://www.avalara.com/



(edited to provide link)

[maddythebeagle]

Now if my State sends me a bill based on their tracking ability, I have no problem sending them a check, however asking me for 3 years of 'back data' is more work than I am willing to put up with.

I really doubt it is back data if you should have been paying it on time...just say what it is...avoiding a tax and posting a "feeler" online to see if you will get in trouble after them matching data up on you...geeze...

Originally Posted by Maddy the Turbo Beagle

I really doubt it is back data if you should have been paying it on time...just say what it is...avoiding a tax and posting a "feeler" online to see if you will get in trouble after them matching data up on you...geeze...

Paying the Tax on Time? - We don't even know where to pay it? - Never heard of it?

Not sure what your point is here other than to try to antagonize. - So, lets say that you made an internet purchase 3 years ago for $2,000. You sent your Wisconsin Sales tax to where? - And what form did you fill out?

And if you tell me you have never bought anything through the mail or over the internet you are a liar!

[2B]

Originally Posted by Cut-Throat

And if you tell me you have never bought anything through the mail or over the internet you are a liar! *

I am shocked and appalled at your intonation.

Originally Posted by Maddy the Turbo Beagle

I really doubt it is back data if you should have been paying it on time...just say what it is...avoiding a tax and posting a "feeler" online to see if you will get in trouble after them matching data up on you...geeze...

In fact just to show how ludicrous the 'Maddy the Turbo Beagle' post is - Is there anyone on this forum that has paid State Sales Tax for a purchase via the Mail or internet to their state?

Beagle - post crap like this again - be prepared to be embarrassed!

[sgeeeee]

I had not heard anything about this until I read CT's post. Apparently I've been living under a rock. A quick google search on sales tax and internet indicates that there are a lot of states very actively seeking to collect sales tax (or use tax) from internet purchases. It looks like tax free internet is coming to an end.


http://www.nolo.com/article.cfm/obje...1/277/167/ART/
". . . Consumers' Responsibility to Pay Sales or Use Taxes
Consumers who live in a state that collects sales tax are technically required to pay the tax to the state even when an Internet retailer doesn't collect it. When consumers are required to pay tax directly to the state, it is referred to as "use" tax rather than sales tax.
The only difference between sales and use tax is which person -- the seller or the buyer -- pays the state. Theoretically, use taxes are just a backup plan to make sure that the state collects revenue on every taxable item that is purchased within its borders. But because collecting use tax on smaller purchases is so much trouble, states have traditionally attempted to collect a use tax only on big-ticket items that require licenses, such as cars and boats.
. . .
Some states, including Connecticut, Maine, Nebraska, New Jersey, and North Carolina, have changed their attitudes and are stepping up efforts to collect use taxes. But bureaucracy, complex tax rules, and limited state resources have thus far prevented most states from pursuing use taxes. Since state governments are losing substantial revenue, the collection of use taxes may become a priority if the federal government continues its ban on Internet e-commerce taxes. . ."

More Information About Internet Sales Tax
• E-fairness (www.e-fairness.org) represents retailer organizations lobbying Congress for equal taxation.
• The Sales Tax Institute (www.salestaxinstitute.com) provides a range of services and links associated with sales tax.
• E-Commerce Tax News (www.ecommercetax.com) provides news and feature articles about e-commerce taxation, including email updates from an e-commerce expert.


http://www.ilsr.org/newrules/retail/inttax2.html

http://www.washingtonpost.com/wp-dyn...070101475.html

[Sundance Kid]

Yeah, I did, Once! Like an idiot! Even tho, my state says they can't determine how much, or from whom I purchased said items. What really chapped my -ss, was the state determined that I owed tax based on my AGI. What I purchased, was a far cry from what I paid in tax. Won't make that mistake again!

[ERD50]

I just did some googling on this for my state (IL), ran TurboTax AND looked at my IL tax instructions, and on-line at the IL Dept of Rev.

Now, I am vaguely aware that I am responsible for paying IL taxes for catalog/internet purchases when the seller does not collect the tax. However, TurboTax does not seem to ask me about it, I cannot find anything in the IL state tax instructions that come with my IL1040.

But, if you search the IL site for "use tax' you will find the requirement listed on some page buried deep in their site.

http://tinyurl.com/pg8kg

Question: Who must pay use tax?

As an individual, you owe Illinois Use Tax if you purchase an item for use or consumption in Illinois and:

* you purchase the item from an out-of-state retailer who charges no Illinois Sales Tax or charges sales tax at a rate lower than the Illinois rate, and

* the item you purchase would normally be subject to sales tax if you buy it from a retailer in Illinois.

Examples include:

* catalog purchases from an out-of-state retailer who does not charge Illinois Sales Tax;
* purchases through out-of-state home shopping television and computer network services that do not charge Illinois Sales Tax; and
* items purchased while you were
o in another state from a retailer who charged sales tax at a lower rate than the Illinois rate, or
o in a foreign country.

In addition, if you purchase an item for use or consumption in Illinois from an Illinois retailer and you do not pay tax to the retailer, you owe use tax to the department.

Stupid government. If they expect to collect a tax, they need to ask for it in plain English (I'll apologize if it is in the instructions and I missed it). Most of the big ticket items I might buy are from companies that do business in my state, so they do collect the tax. So, if anything, I would have a small liability.

I still think it is stupid - if you have a law, make it enforceable - and then enforce it.

-ERD50

[FlowGirl]

Originally Posted by ERD50

Now, I am vaguely aware that I am responsible for paying IL taxes for catalog/internet purchases when the seller does not collect the tax. However, TurboTax does not seem to ask me about it, I cannot find anything in the IL state tax instructions that come with my IL1040.

Same here. My home state doesn't even collect income tax so there's no handy way for them to collect sales tax from individuals without adding significantly to the bureaucracy. I've heard they sometimes catch people who buy big ticket items like cars out of state - so there must be something to fill out and send somewhere, but like Cut-Throat I've never heard of it. No forms at the library, no mailers, no TV ad campaigns or billboards reminding people to pay their sales tax, etc. I know it hasn't occur to me to keep a detailed list of every $20 Ebay and Amazon purchase on the off chance that it might add up to more than the limit. Most of us order online because its convenient, and we'd pay the tax if it was just as convenient...

[Martha]

If you look at your state's income tax form, most have a place for you to indicate the amount of out of state purchases you did not pay a sales tax on, and you are supposed to pay that tax when you pay your income taxes.

Here is the Minnesota rule on sales/use tax on out of state purchases: http://www.taxes.state.mn.us/use/pub...CM1_002975.pdf


Here are the instructions for Minnesota income taxes that raise the sales tax issue on page 9: http://www.taxes.state.mn.us/instructions/m1_inst.pdf