Retroactive Taxation?

[Cryozombie]

As of December 2010, Illinois residents are required to pay a usage tax on items purchased outside of the state.

Here's the basic story: According to articles I have read Illinois tried to collect Sales tax from businesses that sell to Illinois residents via Mail order. Buisnesses said "No Way" and it went to the Supreme court who ruled Illinois had no right to tax businesses in other states.

So now Illinois has passed a "Usage Tax" that basically states, any Items purchased outside Illinois are subject to a 6.5% Usage tax buy the purchaser if Illinois doesn't revive sales tax for the item. Meaning if I mail order a tin soldier from California, or if I cross into wisconson and buy cheese, I am required to declare it on my taxes and pay 6.5%. Bogus, but thats what it is.

Here's the kick in the pants:

Illinois is requiring their Residents to declare and pay taxes on all items purchased out of state, retroactive to 2004. So for 6 years while the law was not in effect, the state is demanding we pay anyhow.

Double You Tee Eff?

 

[Archangel M]

Good luck trying to enforce that. Unless you are purchasing a large ticket item like a car, I doubt anybody is going to track what each person is buying across the state line.

 

[Bob Hubbard]

A number of states have similar. NY for one wants us to pay NY sales tax on items purchased out of state. Good luck on getting NY tax on that soda I bought in Mexico.

 

[chrispillertkd]

As of December 2010, Illinois residents are required to pay a usage tax on items purchased outside of the state.

Here's the basic story: According to articles I have read Illinois tried to collect Sales tax from businesses that sell to Illinois residents via Mail order. Buisnesses said "No Way" and it went to the Supreme court who ruled Illinois had no right to tax businesses in other states.

What is to prevent the courts form making a similar ruling here? It seems to me to simply be the legislative branch trying to make an end run around this ruling (at least from what what I understand you to be saying).

So now Illinois has passed a "Usage Tax" that basically states, any Items purchased outside Illinois are subject to a 6.5% Usage tax buy the purchaser if Illinois doesn't revive sales tax for the item. Meaning if I mail order a tin soldier from California, or if I cross into wisconson and buy cheese, I am required to declare it on my taxes and pay 6.5%. Bogus, but thats what it is.

As a friend of mine said on his way through customs while returning from a year in Mexico while wearing a three foot wide sombrero and carrying two suitcases of things bought south of the border: "I have nothing to declare!"

Seriously, this law will be almost completely unenforcible.

Here's the kick in the pants:

Illinois is requiring their Residents to declare and pay taxes on all items purchased out of state, retroactive to 2004. So for 6 years while the law was not in effect, the state is demanding we pay anyhow.

Double You Tee Eff?

I'll be interested in seeing how many of the people who vote for this bill are re-elected.

Pax,

Chris

 

[Bob Hubbard]

Illinois doesn't seem to think the USSC has any say there, as Chicago's proven with gun laws. Since taxes = more $$ for pork and pet projects, of course they'll ignore rulings, until told no, in which case they'll write a new law and run with it until told no again.

 

[jks9199]

A number of states have similar. NY for one wants us to pay NY sales tax on items purchased out of state. Good luck on getting NY tax on that soda I bought in Mexico.

Virginia does too -- but it's only on stuff that wasn't taxed when purchased. It's part of the annual income tax paperwork. From the tax website:

What is Consumer's Use Tax?
Consumer's use tax is the "other half" of the Virginia retail sales and use tax requirements. Typically, you incur the consumer's use tax if you made more than $100 in purchases during the year for which you did not pay sales tax. Common instances of these types of transactions are purchases from the Internet, mail-order catalogues and cable television shopping channels. The tax also applies to tax-free purchases you make outside of Virginia, such as buying furniture at an outlet in another state and having it shipped to Virginia. The tax is 5% of the cost of regular non-food purchases and 4% on purchases of food for home consumption. Report the tax by filing Form CU-7 by May 1 each year, or by reporting it on Schedule ADJ, line 21.

 

[Cryozombie]

Virginia does too -- but it's only on stuff that wasn't taxed when purchased. It's part of the annual income tax paperwork. From the tax website:

That part I kinda get, what I am... upset about... is the idea of owing the state retroactively for almost 7 years of taxes before this was made a law.

Previous to this, apparently only the Business tax code in Illinois required someone to pay for items non-taxed in other states, but they seem to feel that now this is law, they are entitled to payment for those prior years from individuals.

Oh, it's also ok if you don't know how much you have spent over that period: The state is planning to estimate what they think it might have been and send you a bill plus fines and penalties for those back taxes if you don't take advantage of their amnesty period and declare it yourself.

 

[chrispillertkd]

That part I kinda get, what I am... upset about... is the idea of owing the state retroactively for almost 7 years of taxes before this was made a law.

I am waiting for the day for people to wake up and realize that money is just another form of property and that this is an attack on the right to private property.

Previous to this, apparently only the Business tax code in Illinois required someone to pay for items non-taxed in other states, but they seem to feel that now this is law, they are entitled to payment for those prior years from individuals.

How do they justify the retroactive taxes? Is 2004 the year they tried stealing ... I mean charging sales tax on things bout out of state in the first place? (If it is I imagine SCOTUS is going to be even more likely to overturn this law since it would be an overt slap in their faces.)

Oh, it's also ok if you don't know how much you have spent over that period: The state is planning to estimate what they think it might have been and send you a bill plus fines and penalties for those back taxes if you don't take advantage of their amnesty period and declare it yourself.

Hey, Big Brother is looking out for you. This way everybody wins.

Pax,

Chris

 

[Bob Hubbard]

I thought there were court cases that said retroactively billing you like this wasn't kosher?

 

[Empty Hands]

I thought there were court cases that said retroactively billing you like this wasn't kosher?

Apparently retroactive tax laws are not considered ex post facto laws, which was decided back in 1798. This was surprising to me, I thought they would have been unconstitutional.

 

[Bob Hubbard]

Apparently retroactive tax laws are not considered ex post facto laws, which was decided back in 1798. This was surprising to me, I thought they would have been unconstitutional.

Probably are, but case law hasn't caught up the the Constitution.

 

[jks9199]

I agree with that. In fact, I kind of wonder if it's not unconstitutional. It seems to be a great example of an ex post facto law...

 

[Empty Hands]

I agree with that. In fact, I kind of wonder if it's not unconstitutional. It seems to be a great example of an ex post facto law...

Calder v. Bull, 1798. By a vote of 4-0, the justices held that ex post facto laws applied only to criminal penalties. In the case at hand, the Connecticut legislature was thus empowered to grant retroactive changes in a probate case. From what I can find, no further decisions have impinged on this ruling.