EDITORIAL: Pa. tells taxpayers to 'pay up' on internet purchases, but ...

Express-Times Photo | BILL ADAMSPennsylvania Gov. Tom Corbett.

How?s this for tax fairness? Internet retailers just got a reprieve from the state of Pennsylvania on the deadline to begin collecting sales tax. Initially set for Feb. 1, it was pushed back to Sept. 1 because large online sellers, including Amazon, said it was impossible to get everything geared up by Feb 1.

Fair enough, the Department of Revenue said.

But individual taxpayers in Pennsylvania aren?t getting the same treatment. They?re expected, under threat of audit and penalties, to report their online purchases from 2011 on their state income tax forms and remit 6 percent. It applies to any purchase on which the seller didn?t collect Pennsylvania sales tax, whether the transaction was online, by phone, by mail or in person.

The 2011 state income tax form includes a line for the total of untaxed purchases and computing the tax due. For those who weren?t keeping receipts, there?s a friendly ?here?s what you probably owe? way to estimate the tax, based on your income level.

If this strikes you as unfair, tough. The state says it?s going after you, scofflaw. Tax cheat.

This requirement, called the use tax, has been on the books since 1953. While businesses generally pay it, the state never went after individuals, and it wasn?t an issue until Internet sales went through the roof.

To make matters worse, Gov. Tom Corbett ? who just confirmed his conviction that Pennsylvanians shouldn?t benefit from a tax on natural gas extraction ? didn?t get around to telling taxpayers about the state?s intent to go after online sales tax until Nov. 28 of last year. Until ?Cyber Monday,? in other words.

There are good reasons to insist on uniformity in sales tax collection. The state constitution mandates it, as with all taxes. Pennsylvania estimates it loses $380 million annually through online sales. Also, the lure of tax-free Internet buying steers profits away from brick-and-mortar retailers, who collect and remit sales taxes, pay the overhead associated with running a business, and contribute in other ways to their communities.

The only sure way to eliminate the online loophole is for Congress to set a collection standard for the entire country, but that?s not on the horizon.

In the meantime, states can continue to press Amazon and other large retailers to collect sales taxes and pay up. That?s what Pennsylvania is doing.

Yet those retailers have until Sept. 1 to begin meeting that obligation. Individual taxpayers in Pennsylvania will be targeted for audits if they file inaccurate income tax returns for last year, due April 17.

What?s fair and uniform about that?

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