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Old 07-19-2012, 07:00 AM  
Sunny Day
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Use Tax

Until a few years ago states had plenty of money. Now with the Recession they are scrambling for money.

In states that don't have an income tax they won't send out the forms as that costs big money.

However the IRS shares your tax information with the state's tax collectors. Even states that have no sales tax are going to draw a line in the sand and will start to see if there was a use tax payment. They'll use an artificial formula based on gross income that you must have made some out of state purchases and are subject to use tax.
Say you make $1,000,000 they might decide you might have bought $10,000 and owe $800 in use tax and a penalty for non-filing. So any out of state purchase you make keep receipts. Amazon always sends you those emails showing sales tax paid.
The use tax might not be that much, but the penalties might be a hell of a lot.

By the same token, property and state income tax are deductible for the feds and there's also a formula to deduct sales tax based on gross income.
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