Illinois use tax - what do YOU do?

[FEDUKE404]

i'm currently preparing 2012 tax return for part-year resident of Illinois.

Tax return asks (with an imposing "do not leave this line blank" warning!!) for use tax on internet, mail order, or other out-of-state purchases. They then provide an appropriate table for the amount to enter on the tax form.

For those in Illinois, and who contend with this issue on a regular basis, what is your suggestion? I've heard everything from it's extortion money, to paying a "protection fee," to ignore it and let them come after me.

While the amount is not large (<$25) it's the principle of the thing that rubs me the wrong way.

Suggestions or guidance, please.

FE

[Matt Sova]

Michigan

Michigan has the same thing. I ask my clients how much they purchased without paying sales tax. They say "what?" I ask did you buy anything over the internet from out of state, because you have to pay the state sales tax with your Michigan tax return. Many reply, "oh, nothing. I never buy anything online". A 0 goes on the form.

[Lion]

CT and NY ask the same question on their state returns. Many clients tell me 0. Once in a while someone gives me info. A former client had to go through a three-year state sales tax audit after her "0" did not agree with info CT received from NY.

[Traveling EA]

Use Tax

WI has a line - "Sales and use tax due on internet, mail order, or other out of state purchases" ____
Right below, another line, "If you certify that no sales or use tax is due, check here __"

2011 was the first year that had the blurb about certifying that no tax was due.

Don

[FEDUKE404]

IL threatens?

WI has a line - "Sales and use tax due on internet, mail order, or other out of state purchases" ____
Right below, another line, "If you certify that no sales or use tax is due, check here __"

2011 was the first year that had the blurb about certifying that no tax was due.

Don

Interesting approach to things by WI.

That is similar to my original question about "do not leave this line blank" on the current IL return where a "suggested" number comes from a table in their instruction booklet.

Guess I'll sleep on it . . . .

FE

[Terry]

Pa

PA has a "Use Tax" line on their return, for purchases from mail-order catalogues, internet, etc.
If client knows, I put the correct figure in, if they know they purchased items, but don't know how much, we use the use tax table provided by the state. If they tell me they didn't purchase anything, then I put a zero on that line.

[Justataxguy]

NY has a figure to plug in based on people's income. Most tell me "No" but their are a few who do a lot of internet shopping (or buy their smokes from the Indian reservations) that say "if that's all they want then yes".

[dkss]

Indiana also has a line for use tax due. Most of my clients also have that dumb look when I ask. And I think OK has a pre-calculated amount based on income, with the option to opt out if none due. I had a client a couple years ago get hit with a big tax bill (approx $5000), because she bought a lot of cigarettes online to avoid sales and cigarette taxes!! She learned her lesson the hard way.

[Justataxguy]

I had a client a couple years ago get hit with a big tax bill (approx $5000), because she bought a lot of cigarettes online to avoid sales and cigarette taxes!! She learned her lesson the hard way.

I know of someone who was ordering smokes online for a disabled relative, and I kept after them to stop doing it so they wouldn't end up like that. Thankfully they listened and and haven't had that problem.

[Lion]

In CT, if the line is blank (as opposed to 0) then CT considers that no Sales & Use Tax return was filed. Therefore, no SOL; and they can go back as many years as they want in an audit.

[FEDUKE404]

No entry result

In CT, if the line is blank (as opposed to 0) then CT considers that no Sales & Use Tax return was filed. Therefore, no SOL; and they can go back as many years as they want in an audit.

Not quite sure what a Sales & Use Tax return issue has to do with the line entry on a personal income tax return as cited here (line 23 of 2012 Form IL-1040).

And your definition of SOL must differ significantly from what I usually associate with that term....


FE

[Lion]

Statute Of Limitations!

If leaving the use tax line blank, then no use tax return was filed and no SOL and that year never closes to audit for use tax issues.

[FEDUKE404]

Oh, the humanity !!

If leaving the use tax line blank, then no use tax return was filed and no SOL and that year never closes to audit for use tax issues.

WOW! Then I guess (as stated above) the many tax clients of Matt Sova, Lion, Terry, yours truly, and countless other TTB tax preparers are now exposed to tax audits ad infinitum for merely failing to enter any amount on the appropriate line of their personal/individual state income tax returns ??

FE

[Traveling EA]

Use tax

Lion is correct, at least in some states including WI. If the line is left blank, it as if a sales and use tax return was never filed, therefore all years are open. If there is something in the line, the statute of limitations runs for 4 years.

Don

[DexEA]

Lion is correct, at least in some states including WI. If the line is left blank, it as if a sales and use tax return was never filed, therefore all years are open. If there is something in the line, the statute of limitations runs for 4 years.

Don

You can not efile the return unless the box to certify no purchases w/ sales tax due is checked or an amount is put on line 36, so are you saying the box checked is not good enough, you must put a zero on line 36 or it will be an open year forever?