new york state untaxed online purchases?!?

March 11, 2008 1:30 PM

Do I have to itemize *all* my online purchases from amazon, etc on my tax return and pay New York State sales tax?

I'm working on my new york state taxes (turbotax's online basic, if it matters) and I've come to this question:

Untaxed Out-of-State Purchases
Let us know if you bought something outside of New York and didn't pay New York sales tax on it. You should still pay taxes on these items (this is called a use tax).

Examples include:
- Internet, catalog, and mail order purchases
- Telephone and TV shopping network purchases
- Purchases made in another state and brought back to New York


WTF? I vaguely remember news about Amazon fighting New York State to add NY sales tax on purchases, but does this mean that I have to dig out all my receipts from amazon and powells and etsy and wherever else for $20 here and there and itemize it? Or is this something I can ignore if I didn't spend over x amount somewhere?

Usual disclaimer -- you're not a/my tax preparer, but if someone can point me to a user-friendly 'how to deal with this' site, I'd greatly appreciate it. This is only the second year I've done my own taxes, and I'm probably overly anxious (anal? me?) about doing everything right.

Other possibly pertinent details: New York State, NYC resident, federal refund based on the standard deductions, not itemizing credits.

Thanks thanks!!

posted by ahimsa to work & money (16 comments total)

If you want to be the world's most scrupulous and honest tax payer, yes, you'll have to dig out your receipts. If you're like the other 99.99 percent of taxpayers, you'll blow it off and write in a big "0" or some small amount to make you look honest.
posted by cosmicbandito at 1:42 PM on March 11 [3 favorites]

I'm not a tax accountant but if you didn't pay sales tax on a online purchase, it's not taxable. However if you bought anything outside NY and then brought it back to NY you are supposed to list them here. Living in Mass with sales tax and if I buy something in NH (No sales tax) and bring it back I'm supposed to pay the use tax in Mass and I'm sure everyone does it...
posted by Ferrari328 at 1:42 PM on March 11

I, uh, read a piece of journalism once, about a guy who lived in two different states which asked about these kinds of purchases. For at least five or six years, this guy bought all kinds of crap online, but didn't mention word one to the tax collectors. Tax fraud, but a pretty common and minor kind, I would guess, and, for this guy at least, nothing bad has ever come of it.

I'm definitely not a tax preparer, a lawyer or anything else. And I'm certainly not encouraging anyone to break any laws. This isn't advice, and it should be ignored.
posted by box at 1:43 PM on March 11 [1 favorite]

I recall having read a while back that NY especially was going to start taking a "closer look" at people who put down "0" in that box. The issue of the state trying to get Amazon to charge sales tax is related, but different.

As far as your question goes, you can do a lot of work in putting together an exact number, or you can just estimate. As long as you're not putting down "0" or some other very low-seeming number, you'll probably be fine.
posted by Godbert at 1:51 PM on March 11

Ferrari328 maybe you should stick to answering questions you know the answer to
posted by alkupe at 1:56 PM on March 11

I asked my tax preparer last year if I needed to pay use tax on an item I bought online and he looked at me as if I were completely nuts, then threw in a somewhat implausible story about Massachusetts revenue agents taking down the plates of cars parked in furniture store parking lots in southern New Hampshire to enforce use taxes and how he always uses his brother's truck to shop in New Hampshire because his brother has New Hampshire plates.
Anyway.

New York has a faintly ridiculous chart (possibly slightly out of date) that tells you how much use tax they think you ought to owe based on how much money you make. If you want to be a good law-abiding egg didn't buy anything really expensive over the Internet/out-of-state, you can probably use the number it suggests and feel safe.

Disclaimer: I know jack about New York state taxes.
posted by phoenixy at 1:58 PM on March 11

As I understand it, yes, you have to pay sales tax. But not many people actually do.

Amazon (and other online retailers) are fighting against having to *collect* that sales tax, since it (1) makes their prices appear higher, and (2) means they may have to have separate rules and procedures for each of the 50 states, instead of just where their distribution centers are.
posted by mrnutty at 2:08 PM on March 11

Doesn't this sort of violate the Constitution? I thought the regulation (including taxation) of interstate commerce was the exclusive domain of the federal government. Heck, per a recent Supreme Court decision (Gonzales v. Raich, and earlier, Wickard v. Filburn), the fed has the power to regulate commerce you're not doing with other states.

IANAL, so I don't recommend that you follow my advice and pay zero, write a 'fuck you' letter to the state, and fight it all the way to the Supreme Court. However, if would be cool if you did.
posted by mullingitover at 2:18 PM on March 11

Boy was I wrong! But I thought I was right! At least I leaned something. Sorry about that.
posted by Ferrari328 at 2:46 PM on March 11

Doesn't this sort of violate the Constitution? I thought the regulation (including taxation) of interstate commerce was the exclusive domain of the federal government.

I take it you've never bought alcohol in Pennsylvania.

As to the NY taxation question, I believe I can say this without violating anyone's NDA, but Amazon is pretty likely working on the infrastructure for this, so that they're ready either way.
posted by Blazecock Pileon at 3:56 PM on March 11

you can probably use the number it suggests and feel safe

My proof of good faith is worth that number. Even though it's a head tax.
posted by oaf at 4:20 PM on March 11

Oh, and that ridiculous chart is buried somewhere in the instructions to your individual NYS tax return.
posted by oaf at 4:22 PM on March 11

means they may have to have separate rules and procedures for each of the 50 states, instead of just where their distribution centers are.

Incidentally, it's WAY more than just the 50 states. Lots of states have certain areas with different tax rates. But it's still just belly-aching from the online stores... sales tax calculations is a solved problem that plenty of real companies deal with everyday.
posted by smackfu at 6:22 PM on March 11

Doesn't this sort of violate the Constitution?

It violates the Constitution to make Amazon collect the tax. It does not violate the Consitution to make a citizen of the state pay a use tax.

I thought the regulation (including taxation) of interstate commerce was the exclusive domain of the federal government.

Meet the dormant commerce clause.
posted by probablysteve at 6:08 AM on March 12

In the years before the internet you were still supposed to pay sales tax on stuff you got from mail-order catalogs. Nobody did because records were virtually impossible for the states' individual tax enforcers to recover.

With the internet age came lasting, 'easily' searched, and available sales records and receipts so now states feel they have a fair chance at getting people to actually pay and are making people more aware of their legal obligations.

As an individual you are probably safe, but if you are buying $10k worth of stuff a month from out of state and marking it up and selling it on Ebay without a resellers permit you'd better watch out.
posted by whoda at 7:47 AM on March 12

"California and New York taxpayers are supposed to pay sales tax on out-of-state Internet purchases, but the burden is on the taxpayer, not the online merchant. In both states, when you fill out your state return, you're asked to report and pay tax on out-of-state purchases, but tax authorities have no effective way to determine how much individuals really paid to out-of-state merchants. Under current law, it's a tax that's almost impossible to collect."

Just what a quick Google search turned up for me.
posted by PinkButterfly at 11:15 AM on March 12