The Daily Times

http://Amazon.com

As part of a state law passed in 2012, Amazon must inform Tennessee customers about the amount of purchases they made in the previous calendar year and alert them to their obligation to pay the state’s use tax, a counterpart of the better-known sales tax.

The message includes a link to online information about calculating and paying the tax: https://apps.tn.gov/usetax.

Currently, collection of the tax is based on an honor system although the state does pursue leads on the purchase of big-ticket items out of state.

“It is a situation where we depend on the taxpayers to voluntarily come forward and pay the tax on the items they are bringing into the state,” said Billy Trout, manager of taxpayer services for the Tennessee Department of Revenue.

The use tax is not very well-known to Tennessee consumers although it has been on the books for many years.

“In 1947, the use tax came into existence on the same day that the sales tax came into existence,” Trout said. “The use tax is sort of the twin of the sales tax. It is designed to allow Tennessee to collect money on items that come in our state from out of state that had no Tennessee sales tax paid on them.

“In years past, we dealt with catalog sales and things of that nature. Now the prevalence of Internet sales have gone up. Clearly the marketplace is virtually worldwide. The consumer use tax has been a hot topic and is certainly a source of potential revenue that the state is not able to collect.”

Amazon does not currently provide information about customer purchases to the state, but beginning Jan. 1, 2014, it will begin to collect Tennessee sales taxes on online purchases. “The bottom line is it is a situation to where they do have to start collecting tax beginning next year, according to the statute,” Trout said.

The state does pursue collecting the use tax when it receives information regarding out-of-state purchases.

“We do get some information from other taxing agencies and our own audit staff that can indicate which taxpayers may have brought items into the state,” Trout said. “The classic example is carpet from Georgia. ... When they bring that to Tennessee, they should pay use tax on that. If we do get information from state of Georgia, we would certainly pursue that with an assessment.”