Some states asking the tax man to get tougher

May 28, 2012 • Business

In this May 17, 2012 photo, Richard Lowe poses atop a pile of mulch in Morrisville, Vt. Nursery owners and landscapers around Vermont have been getting big bills from the state recently for unpaid sales taxes on products like bark mulch and soil additives that many thought had an agricultural exemption from the 6 percent levy. Some are complaining that they were caught unaware of a change in the tax code made six years ago. “You don’t just change the taxes and laws and not tell somebody,” said Lowe, owner of Green Mountain Landscaping in Morrisville, who is fighting $18,000 in bills for back taxes. (AP Photo/Toby Talbot)

MONTPELIER, Vt. (AP) — Dentist Frank Illuzzi was stunned when Vermont tax collectors began demanding a 6 percent sales tax on the value of toothbrushes and floss he hands out to patients. Senior care facility operator Jay Grimes was similarly surprised to get a $350,000 bill slapping a 9 percent restaurant tax on the meals served to residents in the dining room. Landscaper Richard “Buckwheat” Lowe got $18,000 in bills taxing him for the first time ever on the mulch he sells.

Vermont is among a handful of cash-strapped states getting more aggressive about collecting every tax owed — hiring more collectors, hounding scofflaws and exploiting corners of their tax laws that haven’t been enforced in years. It’s an effort to avoid what politicians from both parties are dead set against: raising taxes.

“You don’t want to raise taxes until you’re very sure the taxes that people are supposed to pay are being paid,” said Rep. Janet Ancel, chairwoman of Vermont’s House Ways and Means Committee.

Under adamant no-new-tax Democratic Gov. Peter Shumlin, Vermont has added about 10 new tax compliance auditors and has stepped up efforts to scour records in rural areas, and add greater scrutiny to Login to read more

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