Government Demands More Transparency of Use Tax Liabilities
State and local governments demand more transparency regarding use tax.
As capturing use tax liability has become increasingly important, states and local regimes have begun initiating certain requirements on the reporting of taxable transactions. Many city governments are also attempting to find out more about purchasers’ use tax liability.
According to an article posted on Bloomberg BNA, “Several states have advanced bills imposing notification and reporting requirements on out-of-state sellers during the most recent legislative session, perhaps as a result of the Supreme Court declining to hear the Direct Marketing Association’s appeal in December 2016. States with pending notification and reporting requirement bills include Arkansas, Georgia, Kansas, Hawaii, Nebraska and Utah.”
There are also states that are considering unstandardized regulations and bills. For instance, Pennsylvania is considering a bill that requires sellers to notify customers that they may owe use tax but, unlike many states, it does not require sellers to report the total amount of the consumer’s purchase.
From a consumer’s perspective, it is important to know that these rules only require sellers to report the dollar amount of sales made. Specific details of purchased items will not be disclosed.
Will these new notification and reporting requirements be considered constitutional and, if so, will they actually compel sellers to collect and remit taxes?
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