By Aaron Kesel
Thanks to a new law in Vermont, the state may soon know your online purchases to pressure residents to pay a “use tax,” WCAX reported.
Vermont’s use tax is meant to make sure that Vermont citizens don’t shop online or across the border to avoid the state’s sales tax. Currently, only about 10 percent of people pay the 6% use tax according to Tax Commissioner Kaj Samsom. He estimated about half of taxpayers owe the tax. So about 80 percent of people are currently not paying the tax. But that may change next year as the new measure will allow tax authorities to chase after residents who don’t pay the tax.
Lawmakers passed legislation that requires online retailers with more than $100,000 in sales to Vermonters each year to report to customers and the tax department how much they’ve spent with them. This measure applies to anyone who has spent more than $500 with an online retailer. The state hopes you’ll use that information to calculate how much tax you should have paid.
This has sparked privacy concerns, although Samsom assures that the product purchased wouldn’t be shown to tax authorities, only the retailer and the customer’s name and address.
“It is focused on folks with a lot of online activity with larger vendors. The information would be pretty bare-bones, we expect, if it complies with the law which is the name of the retailer, the name of the taxpayer and probably the address. Not what they purchased,” Vermont Tax Commissioner Kaj Samsom said.
It has put Samsom in a tough spot. He had testified against this to lawmakers.
“But now I have to enforce it,” he said.
Samsom said Republican Vermont Gov. Phil Scott opposed the data collection, citing privacy concerns.
“There were privacy concerns because if you think about it, just the name of the vendor is a new set of information that Vermonters are not used to the tax department having,” Samsom said.
“He did receive one of the use tax letters from the Tax Department,” Rebecca Kelley, a spokeswoman for the Governor said. “It shows you that there was no bias in who the letters were sent to.”
The state and Vermonters should get the first round of data from online retailers at the end of January, the news publication reported.
Samsom said the state is missing out on about $20 million. So even if the effort by the tax department doesn’t collect all the money owed, they hope to at least get some of it.