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.