As a followup to my recent article about paying sales tax for online purchases, I wanted to highlight an interesting article from last summer that a reader named Heather pointed out in the comments section.
In short, Arizona has added a dedicated line to their state tax returns for taxpayers to reporting unpaid use taxes. This isn’t a huge deal in itself, but… According to a local tax pro named Ellen Campbell, the AZ Department of Revenue has been advising taxpayers that anyone who fails to report something on that line will be subject to an income tax audit.
Whether or not this is true remains to be seen, but it’s hard to imagine trying to enforce something like this. Perhaps it will raise your odds of an audit, especially if you fit certain other criteria (e.g., income above a certain threshold), but auditing every single return that fails to report use tax? Seem unlikely, but… Never say never.
Regardless, this is just more evidence that states are getting serious about collecting unpaid sales and use taxes.