Nobody Pays Use Tax--And Therein Could Lie a Big Fight
Seattle Post-Intelligencer (08/30/00) Vol. 104, No. 42 p.B14; Virgin, Bill

According to Washington State's tax code, purchases made outside the state, in states with no sales tax or a lower sales tax, are subject to a use tax. Other items subject to the use tax are items bought at garage sales, through a newspaper classified ad, through a mail-order catalog, or over the Internet. But, not surprisingly, most people do not pay the use tax, and the government does nothing about it. Mike Gowrylow, a spokesman for the Department of Revenue, said, "Our system isn't set up to track things that way ... Frankly, it's very difficult to enforce." But a fight over the tax seems to be inevitably approaching, because sales tax revenues are expected to seriously decline as more consumers make their purchases over the Internet. Local businesses are suffering, complaining that Web retailers have an unfair competitive advantage without the same tax burden. These business owners are backed by states that do not want to see their tax base erode any further. Web merchants, on the other hand, consider themselves too weak to endure any sort of tax collection, and they will get plenty of backing from the American consumer, who is not looking to pay any more taxes than is already necessary.

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