Have you been paying taxes on your online purchases? Did you know you are required by law to do so? If you haven’t, get ready to amend your returns.
As states’ budgets become stressed, many are looking for ways to collect these unpaid sales taxes, and North Carolina is leading the way with a recent audit request for Amazon. In an effort to collect unreported use tax, North Carolina has demanded that Amazon provide the NC Department of Revenue with the name and address of every North Carolina resident who has purchased anything from Amazon since 2003, in addition to records of what each customer purchased. In defense Amazon has asserted the privacy and First Amendment rights of its operations and consumers should be protected. Though the case is still ongoing in a U.S. District Court, it raises concern for those who failed to comply by voluntarily reporting and paying the use tax each year.
Placing the burden of compliance on consumers involves asking people to keep track of all their purchases during the year, how much tax they were charged for each item, and how much tax they should have been charged, which is why compliance has historically been low. The administrative expenses of processing all of the use tax forms by the state(s), and pursuing violators for minimal charges is also prohibitive. However, not all states are taking this approach. Despite the legal burden of payment resting with consumers, many other states’ collection efforts are focused on the retailers rather than consumers, and it seems to be the logical choice. By requiring online retailers to collect sales taxes on purchases, states can be assured that they will receive the tax revenue they have been missing out on, and consumers can focus on getting the rest of their tax data correct.
If you are interested in more information on use tax and it’s applications, feel free to contact us at Blackman & Sloop.
About Blackman & Sloop CPAs, P.A.:
Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit http://www.blackmansloop.com
Contact: CPA cpa@blackmansloop.com
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