Quote:
Originally Posted by HarryT
Surely you have to pay use tax on your purchases if you consume them in your own state, don't you?
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Technically, yes, but there's no method for tracking those purchases. It's up to the individual to report them on their state income tax forms--and even for very honest individuals, trying to remember every purchase made throughout the year that wasn't taxed can be difficult.
Also, consumers have no easy way of knowing which purchases are supposed to have sales tax--foods aren't taxed; services aren't taxed; ebooks are... who knows? My Fictionwise purchases don't have sales tax attached. Neither do my Smashwords purchases. Smashwords is located in my home state; FW is in New Jersey.
For something like Baen or the former Fictionwise setup, with a standing micropay account, when does the need for taxes kick in? When I bought "micropay points," or when I spend those points on specific ebooks? If a store sells a recommendation service (say, $5/month for a list of 20 ebooks they think are good), does that have a tax cost? If it includes a "free" ebook from the 20, does that change the tax setup? (If the book's retail value is $6, how much are the taxes?)
Businesses are supposed to collect sales tax in part so the state doesn't have to educate every individual buyer about the ins & outs of tax laws.
People who buy cars & houses out-of-state get hit for use tax; people who buy holiday gifts by mail-order don't get noticed--until recently, when a notable percentage of all purchases have switched to online. But there's still no mechanism for tracking those sales, and none for informing consumers which purchases they're supposed to pay how much tax on.