The State of Illinois wants us to pay Use tax, a type of sales tax, on stuff we purchased on-line tax-free. Out of State retailers have no duty to collect sales tax for Illinois, and so we purchased stuff on line and saved 6.25%. However, the State says all citizens have a duty to pay the tax when we purchase something and no sales tax was paid. So now the State says if we don't voluntarily pay the last 6 years worth of tax, it will come after us with interest and penalty.
When must I pay Illinois Use Tax to IDOR?
You must pay Illinois Use Tax to IDOR if the items you bought are taxable in Illinois, you used or consumed these items in Illinois, and
when you purchased the items you either did not pay any sales tax to the seller, or paid sales tax at less than Illinois Use Tax rates of 6.25 percent for general merchandise and 1 percent
for food and drugs.
For example, if you purchased
?a computer over the internet for use in Illinois and paid no sales tax, you owe 6.25 percent Illinois Use Tax.
?jewelry while vacationing in Georgia upon which you paid 4 percent sales tax and which you brought back to Illinois, you will owe Illinois Use Tax on the 2.25 percent difference in tax rates.
?cheese by mail order from a company in Wisconsin and
paid no sales tax, you owe 1 percent Illinois Use Tax.
Use Tax (UT) Table
If you had no major purchases and you do not have receipts to figure your purchases, use this table to estimate your annual Illinois Use Tax liability.
Adjusted Gross Income (from IL-1040, Line 1) => Use Tax per year
$0 - $10,000 $3
$10,001 - $20,000 $9
$20,001 - $30,000 $15
$30,001 - $40,000 $21
$40,001 - $50,000 $27
$50,001 - $75,000 $38
$75,001 - $100,000 $52
Above $100,000 Multiply AGI by 0.06% (0.0006)
I think that it ridiculous that they want us to pay the tax difference. ( so if I buy something in another state with less tax I have to pay the difference). What if you buy it in duty free? Kinda defeats the purpose? If I pay more tax can I get a refund???
This really doesn't surprise me. If anyone caught 60 minutes yesterday, Illinois is one of the worst states in financial trouble. Illinois credit rating is beyond junk. Instead of cutting fat and running the state more efficiently, they would rather tax us to death.
I say eliminate taxes on online purchases and just charge a shipping tax.
It is too complicated and not realistic to try and get records from every mom and pop internet retailer, all they will do is go after big ones like Amazon, iTunes, etc where there is real money to be made.