State use tax levels retail playing field
Yes, Tennessee consumers, those purchases you make online are subject to the state’s use tax. http://Amazon.com — as required by a law passed in 2012 — is reminding its customers about that.
The consumer use tax isn’t new. It dates back to 1947 when the state’s sales tax went into effect. If you don’t think it’s important that state consumers pay the use tax, then you don’t understand how much online purchasing is increasing in Tennessee and throughout the world.
And you don’t understand that you are handicapping the business people who have made investments in your community.
They’ve built stores. They’ve hired workers to staff those stores. They’ve paid local taxes that support local schools and libraries and arts centers and firefighters and police and invest in infrastructure.
They’ve tithed to local churches and volunteered to fight for disease cures. They’ve supported local charities and youth sports and centers for senior citizens. They’ve promoted local civic, social and business organizations.
And you don’t understand that by dodging the consumer use tax, you are making it that much harder for Tennessee to remain free from a state income tax.
Those who oppose requiring online retailers to collect state sales tax claim there are too many variations from state to state to make that feasible. Sure. Just like it’s too complicated to keep track of all those credit card and debit card numbers that your customers use to buy your merchandise.
Let’s keep it simple. Here’s how the state Department of Revenue explains it:
Tennessee, like other states that impose a sales tax, also taxes the use of property that is brought into the state untaxed when purchased. The purpose of the use tax is not only to raise revenue, but also to protect local merchants, who must collect the sales tax, from unfair competition from out-of-state sellers who do not collect Tennessee’s sales tax. Effective Jan. 1, 2009, the local use tax rate on purchases or downloads of digital videos, digital books and digital music was established at 2.5 percent.
So, should you file a consumer use tax return? If Tennessee sales tax is added to the price of your online, telephone or mail-order catalog purchase, you don’t owe use tax.
But if you buy or ship merchandise to your Tennessee address and sales tax is not added to the price, you’re responsible for paying the use tax directly to the Department of Revenue. The “how to” is on the web: https://apps.tn.gov/usetax.
Starting Jan. 1, 2014, http://Amazon.com will make it easy for its customers. The company will start collecting state sales tax on that date. That’s part of the agreement Gov. Bill Haslam and state officials made with Amazon as it has opened distribution centers.
New jobs for Tennesseans. More revenue to balance the state’s budget. Yeah, we’ll back that.