It's time for Mississippi taxpayers to stand up to tax dodgers.
It's time to revolt against the State's unfair and discriminatory behavior in the collection of taxes on retail sales. You see, Mississippi law requires residents to pay taxes on all retail sales, except those specifically exempt. But, the State's arbitrary and selective enforcement of tax collections provides a big loophole for tax dodgers.
Taxation of retail sales takes two forms. "Sales taxes" apply to retail sales of tangible personal property made by vendors within the state. "Use" taxes apply to retail sales of personal property by vendors outside the state for use within the state. Use and sales tax rates are the same.
Here's how that works correctly. Freddy Joe goes downtown and buys a new car. The car dealer collects 5% sales tax. Donny Joe goes out-of-state and buys a car. When he comes home and gets his car tag, the tax collector collects 5% use tax.
Here's where it becomes unfair and discriminatory. Freddy Joe goes downtown and buys a lamp. The store collects 7% sale tax. Donny Joe, who has access to the Internet, dodges taxes by purchasing the lamp from an out-of-state, online vendor.
This can happen because a U.S. Supreme Court ruling prohibits the State from forcing the out-of-state vendor to collect and remit use taxes. However, this does not excuse Donny Joe from paying, or the State from collecting, the taxes.
Unnoticed by most, in 2012 Mississippi took a half step to correct this problem by adding a line on its personal income tax return requiring taxpayers to self-report and pay use taxes. As a result, Donny Joe should self-report and pay use taxes on his lamp purchase.
Unfortunately for honest taxpayers, the State has not promoted or enforced this provision, even though willfully filing a fraudulent tax return is a crime.
Meanwhile, the number of tax dodgers grows exponentially as Internet sales take over much of the retail marketplace.
With Americans for Prosperity and other anti-tax groups doing all they can to coddle use tax dodgers, it appears the State will allow its discriminatory collection behavior to continue. This will only change when honest taxpayers stand-up and demand change.
It's time. As more and more Donny Joes use the Internet to dodge taxes, the unfair burden on the Freddy Joes to fund government escalates. Sales taxes comprise 38% of general fund revenues, use taxes 4%.
There are practical steps the State can take to enforce collections. These include prosecuting tax dodgers who audits show filed fraudulent tax returns, making tax preparers culpable if they help prepare false tax returns, and providing a safe harbor tax payment for residents who make limited Internet purchases.
If the State fails to take the next step to enforce collections, taxpayers should seek a court injunction to stop all retail sales tax collections until an equitable collection process is put in place. Poor, elderly, and disabled taxpayers without Internet access or the credit mechanisms required for Internet purchases would be classes most likely to succeed.
Freddy Joe should not pay until Donny Joe does.
26 comments:
There is no greed like government's greed!
Why not get rid of sales/use taxes and increase property taxes? everyone has to live somewhere.
It's funny how a liberal responds when he discovers there's unfairness in the collection of taxes: INCREASE taxes! Hahahahaha!
2:37 - yes, please! Because I move so frequently, I rent.
Increase of tax????Hahahahaha evidently you can't read. The tax already exists. That is not an increase, but it is making everybody pay the tax as it exists. And just who are you calling a liberal, Tonto? Sounds to me like you are a tax cheat - if that's the case, I wouldn't be calling others names.
Another out of touch columnist.
How could one keep up with every single internet or out of state purchase made throughout a year? People buy on the internet so they dont have to put up with crime ridden locations, rude employees, or poorly stocked stores. If the local businesses of government is feeling the pain from internet purchases or reduced tax income, then they need to INNOVATE and COMPETE for business. More regulation will only further stifle the local economy.
For me personally, I am reluctant to give any more tax dollars to the state than I have to, until I see evidence that my money is more effectively managed and spent. But that would contradict the very notion of government.
How does one keep up with every single internet purchase? The same way they keep up with every single prescription purchase, or gas purchase (if itemizing) or other deductible expense. Just as there is a deduction (or at least was) on the federal return for state sales taxes paid, that many people take advantage of, they can keep up with the sales taxes not paid but due.
It doesn't matter WHY someone purchases online - that matters not to the question of this post. Buy your shit wherever you want to, local businesses, those in the metro 100 miles away, or online. Doesn't matter. The issue is that if you purchase an item, you owe the sales tax on it.
Being reluctant to give any more than you "have to" is also not the question. You, by law, "HAVE TO" pay this tax. The point of Crawford's column is that you are supposed to be paying this now -- and if you are not, you are nothing more than a tax cheat.
I now have to pay on Amazon. The state will collect tens of millions a year or more just from that one company. Where is that money going>?
Coming from the same opinionist who remains -- to this very day -- gung-ho about all the false underpinnings used to justify the historic boondoggle known as the Kemper County Energy Facility.
The money is going to the same place all the other sales, income, use, etc tax goes. Into operation of the various state programs - public safety, corrections, mental health, K-12...... Where the hell do you think your sales taxes goes?
Where does it go? It's called the state treasury. Why don't you go online and look at the state budget? If all these no government republicans don't want to raise taxes, then why don't they have the balls to rescind this never enforced, never paid use tax? The only way they get your out of state car tax is because they hold your car tag hostage. It's a legal tax passed by your state representatives and should be paid until abolished. If you don't pay, you're no worse than all those people on food stamps everyone on this blog bitches about.
Build a cyber wall around the state. All internet purchases would be stopped at the wall until taxes are paid.
And we can make the out of state merchants pay for the wall!
I think 2:37 is on the right track. Phase out sales tax. Increase income tax and property tax. It is unrealistic to think that someone who sells over the internet can keep up with all the sales tax laws in every city and state. It is also unrealistic to think that consumers will keep a list of every purchase made online so they can pay tax on it at the end of the year. If the tax is not collected when the sale is made it never will be. The sate could try to catch the folks who don't pay and they could afford to chase big tickets items. But most sales are small items and the cost of tracking that down would be more than the tax.
As for the guy who lives in apartments - no problem. Just tax the apartment owner, he is certain to raise your rent to make up for it.
It don't care how we raise taxes. I am only saying that collecting sales tax is getting very difficult and unfair to local businesses.
5:33...Are you nuts? Who keeps up with every prescription and gasoline purchase by hoarding receipts? Very damned few, that's who. These people who stand around the gas pump waiting for the machine to regurgitate a receipt are fairly-well loons.
The internet sites I visit will charge the State tax if it is State law and they are required to collect the tax.
The sites know where their buyers live.
This is a legislative fix, not a taxpayer fix.
5:33 -- The reason I always wait at the pump for a receipt. Rarely, through mistake or (usually) some illegal connivance, a load of "bad gas" will end up at a station and will be pumped into your car. You could have some moderate to severe damage to your vehicle on account of this. If you have a receipt, you can at least prove where you got the gas before your car broke down. Laugh if you want to, but I've had friends who were able to recover costs of repairs (willingly) from the dealer or distributor, because they had the proof. Just something to consider. You can safely discard the receipt after you drive a few miles, if you wish.
When I buy out of town, if I take the goods home, I am charged sales tax. If they ship to me, I am not.
It's not my concern, nor should it be , when I take the item home, if the sales tax goes to the State in which I made the purchase or to Mississippi.
What I do know is that the business has the best means available to collect and pay whatever taxes are required and that is a part of doing business.
I'm not being paid to do their work for them.
But, business people are all about profit and if we are dumb enough not to know how business has traditionally operated when we, as a Nation, grew and prospered and we are willing to continue to reduce the cost of doing business to help create oligarchs and monopolies instead of ourselves and the Nation as a whole, we get what we deserve.
It's the same with taxes. If we don't understand how taxes should work to make the system function most efficiently, we are hurting ourselves.
But, it's easier to decide all business is good and all government bad. Educating ourselves on what worked and what got broken is way too hard apparently and we are made not to trust those who might enlighten us.
May 21, 2017 at 8:00 AM = Obsessive compulsive
3:29 a.m. - yes, people who itemize deductions on their income taxes do keep up with those receipts; unlike people like you that sit around in their PJs at three in the morning commenting on blog sites.
11:59, to think it is unrealistic for internet sellers to be able to handle sales tax laws in 50 different states is ridiculous. These sellers are able to operate a business that takes orders from all over the country, handles the products and ships (after applying the appropriate shipping costs) to 50 different states and multiple countries. Don't know if you have met it yet, but there is a new technology called computers - they can keep track of and apply an amazing number of different conditions and operate with plenty of "if x, then y" functions. Yes, they can keep up with the sales and the appropriate taxes, and most are already doing it.
Mississippians that actually own property and generate enough income are already "taxed" to death with very little to show in return. I am sick and tired of the internet/out-of-state tax whining. Trust me the state has no problem tracking down tax revenue owed by businesses and income earners. And truly, how many people spend a lot of time and energy trying to avoid paying the 7% sales tax? Amazon was convenient and it was nice not to have to pay sales tax, but people will still use it sales tax or not because it is still convenient and they actually get customer service.
Mr. Crawford needs to talk to people that actually pay a ridiculous amount in taxes already. At this rate the Mississippi will be lucky to have anyone left living here that is a taxable income producer in the next 30 years. The schools, healthcare and economy of Mississippi just scream: move here! stay here! it's the place to set down some roots. Not.
4:59 PM Much higher taxes are coming for property owners. As the state stops funding roads and bridges, schools, healthcare, law enforcement, fire departments, and so on that puts the burden on each county how to provide those services. Counties will have no choice but to raise taxes to pay these services.
Cut all taxes. Starve the beast. Who needs government anyway. Long live Tater, Phil, and Phillip. I've got an idea!! Let's start by reducing the legislative branch and the governor's office. The jack around for 3-4 months a year and accomplish nothing. What harm can be done by reducing their numbers?
2:46; Do you understand the amount of medical expense you have to reach annually in order to have a medical deduction? Just go ahead and keep all those receipts for Depend and Metoprolol in a cardboard box.
And there is absolutely no reason to keep up with gasoline receipts (for tax purposes) unless you're planning on writing off a personal vehicle for business use. But go ahead and keep them. Just be sure you don't include the nabs and hershey bars.
I agree with the obsessive-compulsive comment if that fellow is assuming his car might break down three miles down the road due to bad gas. After all, he knows people who had this happen who kept their receipts. Sure he does. I read it here. It's gotta be true.
So as more shopping moves to the internet, who pays for police, fire and fixing roads?
"And there is absolutely no reason to keep up with gasoline receipts (for tax purposes) unless you're planning on writing off a personal vehicle for business use. "
Unless you have a job, as some of us do, that requires some travel and reimburses us when we turn in the receipts.
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