The Tax Commission has a message for all those holiday shoppers making their purchases online: You still owe Idaho tax. If the online retailer doesn't charge the tax, Idahoans are required by law to pay the 6 percent tax, in this case called "use tax" rather than sales tax, when they filed their next income tax return. More than 9,600 Idahoans paid the tax on their 2012 state income tax returns, the Tax Commission reports, paying more than $544,000. "But that number is estimated to be a fraction of what is owed," the commission said today in a news release.
As the holiday shopping season gears up, Randy Tilley, audit division administrator, said, “We encourage folks to keep track of their untaxed purchases, total them up at the end of the year, and make a payment when they file their income taxes next year.” He noted that the tax has been around since 1965; it applies to purchases that Idahoans make, whether they're on the Internet, by telephone or from a mail-order catalog, "if the goods are used, given away, stored or consumed in Idaho." Click below for the Tax Commission's full news release.
Idaho State Tax Commission
FOR IMMEDIATE RELEASE
Holiday shoppers: You may owe use tax on Internet purchases
BOISE, IDAHO — Nov. 25, 2013 — With Black Friday and Cyber Monday just around the corner, the Idaho State Tax Commission is reminding online holiday shoppers and others that they may owe use tax to the state if the seller doesn’t charge them sales tax.
When shoppers buy goods on the Internet, by telephone, or from a mail-order catalog, sellers won’t charge sales tax if they’re not Idaho retailers. In that case, the shoppers owe use tax if the goods are used, given away, stored, or consumed in Idaho. The shoppers are responsible for paying the tax directly to the Tax Commission.
The use tax has been around since 1965 and is the same rate as the sales tax (6 percent). “Most people don’t know about or understand the tax,” said Randy Tilley, the Tax Commission’s Audit Division Administrator. “But it’s an important tool to ensure that Idaho retailers can compete fairly with out-of-state companies that don’t charge tax.” The tax also helps fund state and local services throughout Idaho.
Tilley said Idahoans can report and pay use tax on their Idaho individual income tax returns. “We encourage folks to keep track of their untaxed purchases, total them up at the end of the year, and make a payment when they file their income taxes next year,” he said.
More than 9,600 Idahoans paid use tax totaling more than $544,000 on their 2012 income tax returns, but that number is estimated to be a fraction of what is owed.
“As more people shop online and more sales go untaxed, we’ll continue to raise people’s awareness of their use tax obligation,” said Tilley.