The United States does not impose a national-level sales or value-added tax. Rather, sales taxes, and complementary use taxes, are imposed and administered at the state (sub-national) and local (sub-state) levels. Sales and use taxes are not applied uniformly. Nevertheless, in recent years, a number of trends have begun to develop as state and local governments face increased budgetary pressures.
Most notably the following:
1. In 2008 and 2009, New York, North Carolina, and Rhode Island each adopted laws that require non-resident online retailers to collect tax on sales to in-state customers if the retailer contracts with a New York resident to refer potential customers, via a link on an Internet website or by other means, to the seller. Similar measures were considered, but did not take effect, in California, Connecticut, Hawaii, Illinois, Maryland, Minnesota, Tennessee, and Wisconsin. Taxpayers should expect to see more states attempt to expand their sales and use tax jurisdiction over remote sellers in 2010.
2. Several states increased their sales and use tax rates in 2009, including California (7.25% to 8.25%), Massachusetts (5% to 6.25%), and Minnesota (6.5% to 6.875%). In 2010, more states can be expected to increase their rates as a quick means of raising revenue.
3. Several states, including California, Florida, and Michigan, expanded or considered expanding their sales and use tax base to cover a broad range of transactions, including the transmission and distribution of electricity (Maine), digital goods and services (Kentucky, North Carolina, and Washington), and most professional and personal services (Michigan). In 2010, more states are expected to extend their sales and use tax bases to transactions that historically have been excluded from the tax.
4. At least seven states, including Illinois, Michigan, and Pennsylvania, are planning or considering sales and use tax amnesties for 2010. Under a typical state tax amnesty program, taxpayers that owe past taxes are allowed to register and satisfy their outstanding liabilities with reduced penalty and/or interest rates.
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