MONTPELIER, Vt. — The effort by Vermont to collect more unpaid taxes on purchases made outside its borders or online is part of a long-running effort by states to collect what are known as use taxes, officials say.
Congress has been unable to agree on a national solution, and U.S. Supreme Court decisions have kept states from imposing taxes on the sellers, said Verenda Smith, deputy director of the Washington-based Federation of Tax Administrators, an association of tax agencies.
“States over the years have tried a number of things because they are the ones who are responsible,” Smith said. “And so you’ve got to do as much as you can, and that’s what Vermont is doing — what it can, when it can.”
Last month, the Vermont Tax Department sent about 20,000 copies of a letter to taxpayers across the state reminding them that use taxes are not new and they must be paid. The letter also tells taxpayers how to pay the tax without with fee or penalty.
The letter, sent to Vermont taxpayers Aug. 18, says that since the state enacted a sales tax in 1969, people have been obligated to pay the tax on items purchased out of state, by mail or, more recently, online. It requires the buyer to pay the sales and use tax, now 6 percent, on those items. Food and most clothing are not subject to the tax.
Tax Commissioner Kaj Samsom said the letter is part of an education campaign to remind people of the taxes. There are no broader enforcement plans, he said.
“It’s a misunderstood or poorly understood tax,” Samsom said. “So here’s a bunch of information about it, and at the same time, an opportunity, punitive-, penalty- and interest-free.”
Over the years, some states have tried similar methods to get taxpayers to pay the use tax.
The effort to collect more use tax is part of a broader effort by Vermont’s Tax Department to bring in an additional $1.8 million, Samsom said.
He said he doesn’t yet know how much money the letters have brought in, but he’s pleased with the results so far.