December 29, 2024
Business

State cajoles buyers: Please pay sales tax

LEWISTON – The state has launched an advertising campaign to prod Mainers to pay the 5 percent use tax on out-of-state purchases, but some are skeptical about how much revenue the effort will bring.

Since 1990 state income tax forms have included a line on which Mainers are required to report their tax liability on items they bought from sellers outside the state.

Taxpayers have sent in about $1.5 million annually, far less than the $30 million that Maine should be collecting, according to a conservative federal estimate.

During a three-month amnesty period last fall for people owing back taxes, another $1 million in use tax came in.

“I don’t think it’s necessarily the fear we might catch up with them,” said Stan Campbell, deputy director of compliance for Maine Revenue Services. “I think a lot of them know it’s the right thing to do.”

Campbell acknowledged that the state won’t catch up with lots of people. Without deploying agents along the border, it would be hard to know who’s shopping in tax-free New Hampshire, he said.

Also at issue is the growing amount of tax revenue lost to Internet sales.

“As technology improves, we are going to be trying to identify more use tax debt that should be paid,” Campbell said. “In fairness to taxpayers, you should educate them first.”

As executive director of the Greater Bridgton Lakes Region Chamber of Commerce, Mike McClellan has heard retailers complain about people scooting over to North Conway, N.H., to shop.

He knows it’s an issue, but his gut reaction when he saw the Maine Revenue Services commercial: “I laughed.”

“I hope they didn’t spend a lot of money on it,” he said, expressing doubt that many people will be compelled to come forward.

When people owe income taxes, there’s paperwork, he reasoned. “Somebody could really look and say, ‘Wow, this person really cheated.'”

Robert Busick of Lewiston, who has shopped the Internet for books, also had his doubts.

“I’m definitely not planning on giving the state anything,” Busick said. “If they want their money, they should make it mandatory to take a certain percentage, no matter what.”

The state is exploring that idea. The state is working with the Federation of Tax Administrators to impose a universal Internet tax. That would make it easier for e-merchants to compute, Campbell said, and easier for states to collect.

When sales tax scofflaws are caught by the state, he said the first step is voluntary compliance plus interest.

If someone clearly has no interest in paying, Maine Revenue Services can seize wages or property.

The ad campaign will run through the end of February.


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