Legislation and its impact on Use Tax today

The Marketplace Fairness Act is bi-partisan supported legislation recently introduced in Congress that attempts to close the major loophole allowing online retailers to avoid charging state tax on items purchased from out-of-state.  The only change required is for each state to simplify their tax laws in compliance with the Streamlined Sales and Use Tax Agreement. Is this the end-game to vigilance on Use Tax compliance?  Far from it, it’s an opportunity to make the most of this opportunity before the evaders disappear.

This bill has a lot of things going for it, including many proponents from private businesses, and small business.  However it will take a long time to debate the matter, another long time to get complying states to cooperate, and further to get all retailers to cooperate.  It might be years before any amount of sales or use tax is collected for each participating state.

Many enthusiasts gather on social networking sites like Purse Blog to discuss their favorite designer bags or their antiques or other hobbies that involve personal property that is purchased.  This is a tremendous opportunity to identify these individuals and contact them regarding the Use Tax obligations of their hobbies to the state.  Below is a table outlining the membership of various popular hobbies that involve high priced non-titled personal property.

Hobby ForumTotal MembersTotal PostingsPostings with keywords “Sales Tax”
Shoes 33,71779,302509
Miscellaneous 15,946,893145,340151
Computer Components175,57813,914,71651
Sea Doos55,398304,741848

If you are interested in working with us on identifying and discovery of Use Taxes owing in your state, please contact us.