Reply #51: I know about the use tax, Joe, but it is neither enforced nor enforcable in California [View All]

[slackmaster]

I have read that New York has subpoenaed the Senecas and other Indian tribes for records of non-taxed cigarette sales, and actually gone after some consumers for not paying. I don't know what kind of penalty provisions NY law provides for non-payment of use tax, but California law has none for consumers. Retailers are subject to misdemeanor charges if they are required to collect sales tax and do not. The state could bill someone if they discovered, in the course of an investigation of some other matter, that a person had not paid the use tax; but I have never heard of that happening in California. There is no provision in the law for any kind of penalty for a consumer not paying it. I consider it a voluntary tax. Maybe I am technically wrong about that, but the reality is that a lot of people buy stuff online because it saves them a substantial amount of money.

The sales tax is intended to fund infrastructure and services provided by the state that are of benefit to both retailers and consumers. The purpose of the use tax was supposedly to level the playing field between in-state and out-of-state retailers. It was the epitome of protectionism, enacted during the Great Depression when the state was desperate for money. Internet sales have created a huge sales tax problem for most states, but the problem is partly of their own making. My whole point here is that the state of California increasing its sales tax would encourage more people buying more things in ways that are not subject to any kind of tax that can actually be collected. Raising the sales tax will not necessarily increase sales tax revenues to the desired extent. The state needs to figure out some other way.

I feel as most people here do, that I pay plenty of taxes to the State of California. Tax revenues here have steadily increased over the years even accounting for inflation and increases in population. The state has plenty of money. It just needs to figure out how to budget it like normal people do. The people most likely to be harmed by an increase in sales tax, i.e. the poor, are also those least able to defend their buying power by acquiring things in other states. It's as regressive as you can get.

I haven't given you enough information here to know with certainty that anything I have ever purchased online is necessarily subject to California use tax. I have my taxes done professionally, and my accountant has never asked me anything about Internet purchases. Please don't accuse people of wrongdoing in an open forum like this.