Thursday, May 1, 2008

Foolish Illinois Tax Law Lession

It is unlawful for any retailer to advertise or hold out or state to the public or to any purchaser, consumer or user, directly or indirectly, that the tax or any part thereof imposed by section 3 hereof will be assumed or absorbed by the retailer or that it will not be added to the selling price of the property sold, or if added that it or any part thereof will be refunded....
--35 Ill. Comp. Stat. 105/7.

And Illinois enforces it, with state revenue officials sending these threatening letters to retailers who dare tell customers that they'll pick up the sales tax. It's a Class A misdemeanor offense, that can get you up to a year in jail and a $2,500 fine:

While we do not want to interfere with your advertising techniques, under the circumstances, we are compelled to do so. You should immediately cease advertising that no sales tax will be incurred. Any future advertisements of this kind will be viewed as a continuing violation, which could result in criminal prosecution.

This may be the dumbest tax law in the history of dumb tax laws. If a company offers a 7-percent-off sale across the entire store, that's legal. But if the company says, "We'll pay your 7 percent sales tax," that's not legal. The two are equivalent from the perspective of the state treasury, the seller, and the buyer. It's just a matter of wording. Now there may be a case if the tax is hidden, but here it's not—big posters are advertising that the tax exists and is being paid.

DKK

The Tax foundation -- Suburban Chicago Retailers (Illegally?) Pay Sales Tax for Customers in Stimulus Check Sale

Via: Say Anything Blog

No comments:

 
Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 United States License