Tuesday, March 22, 2011

CA now considering going after individual online shoppers for sales tax

Forbes reports that California is considering hiring private investigators to find out what individuals spent more than $5K on the internet without paying a sales tax (more accurately, a use tax).  While California is prohibited from going after retailers for this money, there is nothing stopping them from going after individuals who owe the tax.

Generally speaking, what stops states from doing this is not the lack of legal authority to do it, but the lack of a financial reason to do it.  After all someone who spends $5K online owes about $300.00 in sales tax in California, so it is not clear that it is worth the state's money (estimated $7-10 million) to hire PI's to track these folks down.

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