Politicians have long debated the "death tax," levied by the IRS on inter-generational transfers of wealth. Now, cash-starved local governments are looking to cash in on the deceased, too. At a recent Longmont City Council meeting, councilwoman Sarah Levison was so concerned a local estate sale was not collecting sales tax that she called authorities to "go out there and figure out what was going on."
Levison voiced her concerns during a Tuesday's City Council meeting, which was exposed on the Longmont Advocate blog written by local activist Chris Rodriguez. The councilwoman's words say it all.
"I noticed that they were not collecting taxes for the city of Longmont," said Levison. "I wonder if there is any system to check on when there are professionally run estate sales to ensure that we are collecting taxes. I hate to think that we might have lost several hundred dollars of tax income that day. I'm also wondering whether or not we could connect with the state to find out if they reported the amount of state sales tax and if we could go back and try to collect it. We need every dime we can get these days."
According to Mark Couch, spokesman for the Colorado Department of Revenue, estate sales are subject to local, county and state sales taxes. But Rodriguez asks, what's next? A tax on garage sales?
Local governments regularly lose out on taxes on occasional transactions, and in many jurisdictions, citizens are technically required to self-report interstate purchases and submit "use" taxes to local authorities. Anyone who has ever purchased a "tax free" CD or book from an Internet retailer is technically in violation of the law.
No word yet on whether the estate sale in question has received a bill from Longmont city hall. But if you're planning to hold a garage sale over the holiday weekend, keep an eye out for Levison.