Next to catalogs, keep state tax forms handy

January 30, 2000|By Christopher B. Summers

SO, WE SURVIVED the media's Y2K hype and all of the countdowns associated with it. But the next countdown has already begun, and the target date is April 15.

This is the day, of course, you send the government more of what you earned and should be allowed to keep.

For the moment, consider this scenario: You've just placed your order with our favorite mail-order catalog or Internet site. After placing the order, your next thought is: "I should have ordered black instead of red; or "I hope the large is not too long."

My next thought is never, "Gee, I better fill out Form 118A."

Form 118A? Yeah, I had to look it up, too. Form 118A is Maryland's Consumer Use Tax Return for Out-of-State Purchases.

The use tax complements the sales tax and works like this: You purchase a coat from an out-of-state, mail-order catalog company and are not charged Maryland sales tax. Consumer's use tax is due since Maryland sales tax was not paid. Individuals must remit this tax to the state on Form 118A. The use tax has been on the books for more than 50 years, and the administration in Annapolis might try to tell you it's a tool to level the playing field for merchants in the state competing with out-of-state companies.

It's amazing how they can tum a pro-business position into a pro-tax position.

The day after Christmas in Annapolis, a local television reporter asked a young shopper if she purchased any holiday gifts through a catalog or over the Internet. Yes, she said. The reporter asked: Did you complete and mail in Form 118A?

Not surprisingly, she had no idea what Form 118A was. After the reporter told her, she emphatically replied that she had no intention of paying the tax. "I pay enough in taxes to this state already!" she retorted.

Comptroller William Donald Schaefer estimates that Maryland is losing about $50 million a year by not collecting payments on large out-of-state purchases. The problem with trying to collect this tax is that most people don't keep records of all catalog or Internet purchases. Even with a $1 billion budget surplus, tax-hungry Democrats are still trying to collect whatever tax revenues they can -- because a lot is never enough when it comes to your tax dollars.

In George Orwell's masterpiece "1984," the vigilant eyes of Big Brother monitor everyone at all times through telescreens, then transmit the activities of every citizen to the Thought Police.

Pretty soon here in Maryland, the comptroller will likely deputize mail carriers so that they can report all deliveries of L.L. Bean and Land's End packages to ensure the ludicrous use tax is paid. Enough already! It's time we reversed the flow of tax money in Maryland.

Christopher B. Summers writes on Maryland tax issues from Gaithersburg.

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