CHICOPEE, Mass. (WGGB) — A Chicopee woman is struggling to pay her bills tonight after the state put a lein on her bank account.
The Department of Revenue says she owes more than $2,000 in taxes and wait until you hear why.
Lynn Provost is a smoker and has been since she was 14, but never in her life did she expect to get a letter from the state – essentially a bill – stating she owed $2,500 in taxes, interest, and penalties.
“I called and they said it was from cigarettes that I bought online from 2009,” Provost says.
What’s more, the letter indicated if she didn’t pay in full by January 13th, the state would take action.
Problem though was that the bill was sent to an old address. She just received it about two weeks ago, long after the deadline, but more importantly, Lynn is unemployed.
“This morning, I checked my balance and I’m at negative $2,100. Seems they put a lien in the interim on my account,” Provost adds.
Now, without any money, it’s not just the tax bill Lynn can’t pay, it’s everything.
Clearly upset, we had to stop the interview so she could compose herself.
“I was going to put gas in my car, and my daughter hadn’t had breakfast yet and I was going to buy her a breakfast burrito, and I had to pay my phone bill….So..can you excuse me for a moment.”
At accounting firm Moriarty and Primack, CPA Doug Theobald says it’s not uncommon for the state to go after people, even years later. In fact, it’s happening more often these days.
“It’s an area where you’re see state’s get very more aggressive in because there’s a lot of dollars they think that aren’t being declared as an avenue to go back and get revenue for the state,” Theobald notes.
Massachusetts has what’s called a use tax at 6.25 percent – the same rate as our sales tax. However, unlike sales tax, the use tax isn’t collected by the retailer.
It’s your responsibility to pay it to the state.
For example, if you buy a TV online for $2,000 and the website doesn’t charge you tax for it, you still have to claim and pay the use tax of $125.
For cigarettes, you also have to pay excise tax. That’s an additional $1.51 a pack, or $15.10 a carton.
“Massachusetts puts that responsibility on tax payers to declare what they’re out of state purchase are in any given year,” Theobald says.
For Lynn, those purchases were cartons of cigarettes four years ago, perhaps saving her about $3 a pack, but in the long run, potentially costing her thousands of dollars.
“I don’t see how this is possible. Maybe it is legal. I don’t know. I’m not a lawyer, but it’s not fair.”
ABC40 contacted the state on Lynn’s behalf. Lynn tells us the Department of Revenue is now working with her to resolve the issue, and has removed the lien on her bank account.
The D.O.R. may also waive the penalty charges, though Lynn would still be responsible for about $1,700 in taxes and interest.
As for how the state was able to track down Lynn’s online cigarette purchases, it’s a matter of federal law. Retailers who sell non-tax cigarettes are required to report the names of all their customers to each state.