The “Dear Taxpayer” letter reads, “Most Vermonters owe use tax, however many don’t fully understand what use tax is or how much they owe.”
Use tax is what Vermonters pay in lieu of a sales tax collected at the time of purchase — usually when buying something online, over the phone, in a state such as New Hampshire that doesn’t charge a sales tax, or by mail. The letter is meant to inform Vermonters that they are responsible for paying that use tax when filing their annual income tax form.
The Department of Taxes is attempting this year to collect more unpaid sales tax, according to commissioner Kaj Samsom. In setting the 2018 state budget, Vermont lawmakers counted on an increased sales tax haul of $3.175 million.
“It’s become a more important thing to emphasize as more sales shift online,” the tax commissioner said Tuesday.
Amazon this year began charging sales tax on purchases made by Vermonters, but many other online retailers do not. Vermont legislators have long grappled with the issue because they have authority only over sellers with a physical presence in the state, giving online retailers a tax advantage.
Lawmakers may have finally come up with a solution. Online retailers who do at least $100,000 in sales in the state and don’t collect tax will be required to report Vermont purchases to the Tax Department in January.
The letter to taxpayers warns of the changes and notes that the reports include “buyer information which will be used in compliance efforts.”
Samsom declined to say how taxpayers were selected to receive the letters.
“Not all Vermonters are getting this letter,” he said.
One taxpayer, who spoke on condition of anonymity because he feared being targeted by the state, shared with Seven Days the letter he received. The tax department noted that he reported $0 in use tax on his income tax form for three years in a row.
The letter, dated August 18, informed him that he could retroactively pay sales tax by October 31 without penalty. The letter offers information on what purchases qualify for use tax, a list available as well on the Tax Department’s website.
The website also provides a chart that estimates sales tax owed based on adjusted gross income. The taxpayer plans to pay that estimated amount, but said he was taken aback by the letter. “My take on it is it’s a bad way to solve a problem,” he told Seven Days.
Samsom said the department has gotten a variety of reactions from letter recipients. Some have paid sales tax they owed, some wanted more information about what items qualify and others complained about it.
“Some people feel the letter is too threatening. Some folks perceive it as a shakedown,” Samsom said. “This is not a shakedown. This is not a revenue grab.”
Samsom declined to say whether those who receive the letter would be targeted for an audit if they don’t pay sales tax retroactively. Anyone who receives the letter and is confident they owe no sales tax should ignore it, he said.
Samsom said about 20,000 of the letters are being sent out at an estimated cost of $1 a letter. He said he expects the mailings will bring in more revenue than they cost to produce.
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It is too a shakedown of taxpayers. This state gets all kinds of money and WHAT DO THEY DO WITH IT?
Those Vermonters who buy a lot of items online w/o paying sales tax and then claim ZERO on their tax forms are undermining the abiity to keep our taxes down. Who should pay for your dishonesty?
And they wonder why no one wants to stay here. We keep getting nickeled and dimed with crap like this it does quite a bit to make me want to move out. I moved here in 2016 and so far this state has done as much as it can to convince me I want to move elsewhere. A great example of this was having to pay the “Use Tax” on my car that I’ve owned outright for over 4 years. “That’ll be $1,200 please,” when registering my car doesn’t exactly make me want to stay.
They need to set up border checks coming in to Vermont from NH. Parking lots in Wet Leb and other NH towns are full of cars with VT plates. All these mostly Upper Valley VT residents are getting a free ride while the rest of VT, mostly Chittenden county, pays their tab.
More Vermont Government Bullshit. It only proves why more and more people are leaving Vermont. When will it stop. Two more years here and I’m gone. Only staying to get the kids through school. That’s a whole other issue, the greedy VEA, teachers are killing us with their greed also
Samsom said. This is not a shakedown. This is not a revenue grab. Boy sure sounds it to me..Whatever happened to the right to buy anywhere you want..That’s like when you buy a used car..say you are the 3rd owner of the car..the state has now collected tax on that same car 3 times..and it’s not just what you paid for it, it’s what it’s worth in the blue book..even tho you have to spend money to fix it…Vermont has become a money grabbing state..So who’s really being dishonest??? Where is this money going??? Can we get some guesses who’s pocket???
We live in Vermont for many reasons, but a common one is because we appreciate the sense of community and caring for one another that Vermonters have. One of the ways that we pay for our services is the sales and use tax. Those of us who live near the NH border could choose to avoid the sales and use tax by moving to NH, but if we choose to live in Vermont, we owe the use tax on our purchases in NH. The state’s calculation system makes it easy to pay the use tax, as we should. It is only fair that the state tax department send letters such as these to those who implausibly claim that they make no purchases in NH or online at sites which do not collect VT tax.
Cool. Before I get any letter about taxes owed, I expect to receive my renter’s rebate. And no — I don’t want to have to take time out of my day to call the Department of Taxes and put on the pressure to receive the refund I am legally owed. And I am aware that I can check my refund status online, although this is pointless when I am repeatedly given the message that the Department “has no record of my return.” The confirmation e-mail I received from the Department in April after I electronically submitted my return — that’s certainly proof to the contrary. And if it’s an issue with the information on the return I filed — I would have expected a phone call or a letter by now. So how about, before shaking down Vermonters for more taxes, the Department does its best to process Vermonters’ renter’s rebates and homestead declarations (which others have not received, leaving them with much higher property tax liability than they were expecting to pay)? Too bad Samsom’s position is not elected — I would mirthfully vote him out of office.
Why am I getting this letter?
If I sent out this letter, I wouldn’t have sent it with the punctuation errors in the first sentence in that paragraph.
So, do all the vendors at the regional fairs have to pay Vermont taxes?
Need to put this on you facebook link so it could be shared.
What a bunch of freakin bullshit!!!!! Yes dear old Vermont, keep sticking it up my ass!!!!! I heard in 2018 there is going to be a device you wear in your mouth and the state is going to start taxing the air.
Stop handing out “free” shit to dead beats and you may have money to do the things you should do like maintain the roads!!!!!!
Any bets on whether the cost is “only” a buck to send out this extortion letter . I’m betting it will end up being more . All in they will probably end up losing money on this latest attempt to vacuum the pockets of all Vermonters .
Any time I think how bad Republicans are on a national level I remind myself how bad the Democrat’s dominance is for Vermont .
“a chart that estimates sales tax owed based on adjusted gross income” – in other words, ‘we don’t know what (if) you actually owe, so just pay us a couple hundred bucks’ No, no shakedown here..