Illinois to Catalog, Phone and Online Shoppers: You Forgot the Tax.

By Chuck Sudo in News on Dec 14, 2010 7:30PM

2010_12_14_amazon_groceries.jpg If you're like us, you've been doing a lot of shopping online. It could be a music or movie download, it could be a whole new server system or home theater setup. Maybe you've been doing some telephone shopping, catalog shopping, or even crossing state lines to find the best deal.

If so, our cash strapped state has decided to turn the Illinois Department of Revenue loose to collect on the back sales taxes. Under legislation passed last year and signed into law by Gov. Quinn, the Dept. of Revenue will offer an amnesty program starting Jan. 1 and running through Oct. 15, anyone who did online shopping between 2004 and now and didn't pay sales tax can do so without penalty.

Now, before you start freaking out and typing in all caps that the tax man is cracking down on online shopping, that's not the case. The headlines here are a bit misleading. According to state tax law, the buyer is responsible for paying state sales tax from online, phone or catalog purchases if the seller doesn't collect them. So if you do all your shopping at Amazon.com or buy holiday gift baskets from Williams Sonoma and they don't collect the Illinois sales tax, you're responsible. Does that mean that they're gonna come knocking your door for the sales tax on an album download you bought? Probably not. They're looking for the sales taxes on higher ticket items: the home theater setups, the huge shopping sessions. Things like that. And, to be fair, we can count on three fingers the number of people we know who save their receipts from six years ago.

The Dept. of Revenue has said that they would add lines on the income tax return forms so that filers can pay the state tax. But this is more of a chance for folks who take advantage of online, catalog or phone order shopping to "come clean" and maybe add something to the return. Short of serving subpoenas to retailers to ask for records of Illinois shoppers, we don't see how this is going to be enforced.