Dilemma - Self-reporting use taxes on internet purchases?

As I am completing my 2003 Arkansas income tax return, the state has included some new forms in the return documents for filers to quantify and pay use taxes on internet purchases that did not assess a sales tax. I believe the form was included last year but I did not complete it or pay in any additional taxes related to internet purchases.

The chances of being audited are very limited. The state has admitted as much in news articles. What is most troubling is I am having pangs of guilt about not reporting this information and paying the taxes I owe. The state of Arkansas’ educational system is very troubled. We are under court orders to improve and better finance our schools. Among various other causes, one of the reasons for inadequate funding is use taxes not paid in internet purchases. The sales tax is the primary funding tool for education in Arkansas. What to do, what to do?

I would rather the online vendor assess and remit the taxes. In many cases I would still use the internet - sales taxes or not. But since that won’t anytime soon, I was just curious about others thoughts on the subject.


Sales taxes on the Internet are anathema.

Paying taxes is fine if everyone does it. Use taxes aren’t an example of this; it’s an absurd tax.

Are you certain that the money from the Internet use tax would actually be put toward school funding?

I can easily see politicians at the state level using it as a bargaining chip to get people to pay up. Thinking of the children and all that …

The way things are working out education is first at the trough for any state spending - ahead of healthcare programs, ahead of the operation of state government etc. I foresee much litigation in the next couple of years on education funding.


Yeah, kind of like how the casino money was going to revitalize education in Mississippi. I’ve seen the spelling of recent graduates on my HS alumni message board…

Stop relying on the sales tax would be a start. Income tax is the way to go, unpopular as it is…

Stop relying on the sales tax would be a start. Income tax is the way to go, unpopular as it is…[/quote]

Local private property tax is the primary funding tool for education in Connecticut. I pay about $5,000 per year on my house (and I don’t have a luxurious estate by any means), about $800 per year on our 2 cars (a 2000 and a 2002). Sales tax goes into the State General Fund. Plus we have about 4.5% personal income tax. I’m not loosing any sleep whatsoever about not paying sales tax on internet purchases.

I have noticed that a few internet vendors have started charging sales tax, however. Was it Landsend.com, or Amazon? Are some of the larger sites collecting it?

I have no state income tax (You can all kill me later), but I wouldn’t voluntarily pay a sales/use tax on internet purchases. Unless, of course, that tax is going to be recycled back into my community.

Schools especially here are so underfunded. I am constantly sending out letters to the community to urge people to vote yes on the school levies. It’s really not very much added onto property taxes (My 4,100 a year tax went to 4,400 … woo ) but people are DEAD SET against education for some reason.

So, arts get cut, sports get cut, juvenile crime goes up. Thanks, community!

We’ve got the same kind of thing in VA. I’d feel much more comfortable paying taxes through the net as part of my purchase than trying to keep records of everything. I’ll buy stuff on a whim but I don’t need a drawer full of slips that may, or may not, be complete. Besides, if the money is coming back to my state (which I hope would be the case) it’s not likely that between the dishonest and the disorganized you’ll ever even see a fraction of what’s really owed.

Stop relying on the sales tax would be a start. Income tax is the way to go, unpopular as it is…[/quote]

A correction to my prior posts. The sales tax is the primary funding tool for the recently mandated educational improvements. The base fund for education is property taxes as mentioned in a prior post. The reason sales taxes are used is the legislature can pass sales taxes with a simple majority. Income tax increases require a super-majority (2/3 or 3/4, I forget which).


There’s no income tax in Texas, either. That doesn’t mean I agree with that policy.

Where I live schools are mainly funded through property taxes. The result is that folks who care about schools move to the right school districts. The problem with that is that if your parents are poor, or just morons, you get a sucky school. I hate that policy. We should give every kid the best education we can, if only because those kids are going to be supporting the economy when we are retired…

Vermont apparently has tried to get around that issue by imposing a state-wide education property tax. I don’t know much about it, except that the concept was to mitigate the type of thing you’re talking about here - - everyone paid one education fee according to the value of their home, and the funds are spread equitably throughout the state. It came to my attention recently when Killington, VT (which hosts a major ski resort in the Northeast) voted to secede from VT because its property taxes were very high due to expensive homes, yet they have relatively few kids who actually live there. I’m sure that vote will stick.

Vermont residents feel free to correct my understanding of events…I think the idea is sound, and in fact necessary. I’m just surprised that there’s a state that had the political balls to implement it.