Yesterday when sharing my camping gear deals, I mentioned that I wasn’t charged sales tax, since I bought from an online place that doesn’t have a Pennsylvania location.
Reader AnnMarie commented:
“You didn’t have to pay sales tax up front, but that’s because the company isn’t collecting it on behalf of your state. But almost every state requires that YOU pay the sales tax, reporting all online purchases for which you did not pay sales tax when you file your tax return, and paying it at that time.”
Hmm. At first, I thought…well who actually does that? And is it even true?
Turns out, oh yes it’s true.
It’s called “use tax.” The Commonwealth of Pennsylvania describes its importance here, basically stating that when we don’t pay sales tax on an out-of-state item, we’re hurting businesses that are in our state since they can’t be as competitive. Because yeah — it’s essentially a 7% discount to shop out-of-state if you don’t pay the sales tax.
Pennsylvania residents — here is the form you need to use. The tax is due by the 20th of the month following the purchase.
First of all, states (at least, PA) are not doing a good job of publicizing this. I didn’t even know it existed until AnnMarie called my attention to it.
Some Googling showed that there had been attempts at legislation to require online vendors to collect sales tax on behalf of the consumer, but it doesn’t look like that has made progress.
Honestly, if states want their tax money from online purchases, they are going to need it automated. Because if people can fairly easily avoid paying taxes, they’re going to. How can the government monitor your online purchases? You’d like to think they can’t just be all Big Brother about it and know…but ya never know.
Do you send use tax payments to your state every month that you’ve made a qualifying purchase? What do you think about the issue?