Wednesday, September 15, 2010

Alabama Department of Revenue sending out tax notices

Via the Birmingham News. 

Umm… Do you remember that nice new bookbag you bought for your daughter before school?

How about that new laptop for your new college freshman?

Did you order a new blue tooth headset for your new cell phone?

Did you pay the Alabama Department of Revenue?  Are ya sure?  Because guess what:  If you live in Alabama, and you shopped online from 2006 through 2008, you may not have and you may be about to get an invoice:

If Alabama taxpayers thought they had finished filing for the year, they might be surprised. Some are receiving letters from the state tax man saying they might owe taxes on purchases made on Amazon and other online and out-of-state retailers.

The Alabama Department of Revenue is sending letters to a number of residents in an effort to collect unpaid consumer use tax from 2006 through 2008. Set at 4 percent, the state's consumers use tax applies to items subject to sales tax that wasn't collected at the time of purchase. This includes computers, books, electronic equipment and clothing, according to the revenue department.

However, tracking who's telling the truth might be too tedious of an endeavor for the state to truly crack down on the average consumer, some experts say.

"It's low-hanging fruit for the state if it can scare people into thinking they're going to get audited by the state," said Brannon Denning, a law professor at Samford University.
Retailers without a physical presence in the state are not required to collect sales tax because collecting and reporting the levy would be too burdensome, based on a U.S. Supreme Court ruling from 1992, said James Bryce, a tax law expert at the University of Alabama.

When the seller does not collect it, however, the burden falls on the consumer to pay it.
"Our records indicate that you did not include consumers use tax on your Alabama income tax returns for tax years 2006 through 2008 and we would like to bring this to your attention this possible oversight," the letter from the Alabama Department of Revenue to taxpayers states.

It’s mostly a scare tactic and an attempt to spook up some revenue during a very difficult economic climate.  The likelihood of the State siccing the Alabama Department of Revenue on Alabamians—many of whom are struggling with their own revenue shortfall—are pretty light.

Now, don’t get me wrong.  If you owe taxes, you don’t fight Montgomery.  Go ahead and do the right thing.  I just think it’s rather silly to ask Alabamians who bought items two to four years ago to remember what they bought and whether they paid the taxes on it.

I live in Alabama.  I shopped a lot on-line from 2004 through 2008.  Hell, most of the Christmas gifts of the last five years were shipped home rather than carried home.  Is it likely I owe some taxes?  I dunno.  I can’t remember.

But I’m sure gonna ask the prospective political candidates if they really, really want to try to prove it.


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