A Fair Deal From the Governor
Originally posted by CityStink
Sunday, Jan. 15, 2012
Augusta, GA
By AL Gray
The author, Al M. Gray, was President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns. Cost Recovery Works is no longer in business, as of December 31, 2020.
Among Governor Nathan Deal’s 2012 legislative proposals there is real gem, one that cries out for implementation and doesn’t require new legislation – taxation of internet sales. Enforcing the abandoned use tax requirements already on the books will increase Georgia’s tax revenues from sales and use taxes to where they should be, increase fair compliance, and put Georgia’s imperiled retailers on equal footing with out-of-state wholesalers and online sales sites, like the booming Amazon.com.
Cries of “taxing the Internet” or this being a tax increase are wrong. Ignorance of the law is no excuse. The existing laws of the states with sales taxes, including Georgia, invariably include a reciprocating use tax. Georgia has a use tax that operates this way – if the consumer buys an item of taxable tangible personal property where the seller did not charge the sales tax, that consumer is legally bound to complete a use tax return and pay the use tax due to the state at the time of filing the return.
This is the use tax return form and instructions explaining how the use tax operates.
No new legislation is needed. This is not a new tax. It is the Georgia “Fair Tax.” Everybody pays, or they should be paying. Why not allow and encourage the Georgia Department of Revenue to audit residents for payment of the use tax on their online purchases? It can be done electronically by requesting taxpayers’ annual credit card listing of transactions to allow the revenue auditors to verify that purchases from unregistered, unremitting out-of state firms have been reported for use taxes and that the taxes have been paid on taxable transactions.
Auditing use taxes would very quickly gain compliance from the imposition of interest at 12% and onerous penalties, provided that the use tax return was updated to provide for payment of these items. Another boost to compliance is that there is an infinite audit period for residents who have not filed, because failure to file eliminates the 3 year statute of limitations. Couple 12% interest onto 10 years of taxes will get anyone’s attention!
The first group to be audited and brought into compliance with the laws of the state should be the members of the Georgia General Assembly. The politicos can lead by example or face being made examples. The Georgia Department of Revenue should be required to audit these Georgia citizens first, publicize failures to comply, and impose full penalties and interest for a number of years.
Once citizens and legislators, alike, rediscover this Fair tax, Georgia’s retailers will have more than a level playing field because of the onerous shipping and handling charges applied by the online sellers.
Congratulations to Governor Nathan Deal on this very timely, justified, reasonable, and fair component to tax reform. It is one that will work. Thank you, governor, and let’s roll with this great idea.
Good Deal.***
Al Gray