I had made out-of-country purchases during the 2020 tax year that I didn't pay North Carolina sales tax on. I have no receipts for any of them except for one. I assumed that bank transaction histories wouldn't count as a record of purchase.
I filed my 2020 North Carolina state tax return already, but now I'm anxious if I made some wrong assumptions.
Do bank transaction histories count as records for purchases made that might be subject to North Carolina consumer use tax?
You seem to acknowledge that these items are subject to North Carolina's Use Tax, so the answer to "Should I refile my state taxes under the premise that I have all records and use the bank statements as best I can?" would seem to be yes.
If they're subject to the tax, they should be reported, regardless of the detail of the documentation.
According to the North Carolina Department of Revenue's Frequently Asked Questions About Use Tax page,
A person will not automatically receive a bill for use tax if an amount for use tax is not reported due. If the Department discovers through other means that a person owes use tax on purchases, the person will be assessed tax plus penalties and interest. In addition, a person may be selected for audit by the Department.
It depends on how detailed your bank statements are. Most statements just list a company, amount and possibly a transaction number. Sometimes the biller will be a parent company. Often times there is no way to tell what was purchased. Was it a product or service? Some places sell both.
That said, if you have no receipts, having bank histories is better than nothing. On the flip side, North Carolina probably has no way to verify your overseas purchases so they will probably look favorably on your bank records.
Thank you for your response!
The statements list amounts, merchants, and locations; but, not transaction numbers nor a detail of the actual items purchased. None have cost $1,000 or more before VAT either, which I assume is the price I base the consumer use tax on (that is, purchase price before sales tax or VAT). Consumer use tax guidelines seem very lacking in specificity.
Was I correct in assuming that I only have partial records and not all, in that case, since I only have one receipt; or, should I refile my state taxes under the premise that I have all records and use the bank statements as best I can?
This distinction seems to make a difference as to whether I will have to pay taxes or not.
If you are unable to determine the sales tax due, NC will also have a hard time trying to determine the sales tax due. You can only claim what you can prove. Move forward with better records.
@AmyCThank you for your response.
The problem is that I don't know if I can prove anything or not. The context isn't asking about the quality of any records in particular; but specifically and as per my previous post, if bank statements that detail neither transaction numbers nor the items purchased can be considered valid records at all for eligible consumer use tax purchases.
Is it your opinion that such bank statements alone could not be used to prove any claims?
You seem to acknowledge that these items are subject to North Carolina's Use Tax, so the answer to "Should I refile my state taxes under the premise that I have all records and use the bank statements as best I can?" would seem to be yes.
If they're subject to the tax, they should be reported, regardless of the detail of the documentation.
According to the North Carolina Department of Revenue's Frequently Asked Questions About Use Tax page,
A person will not automatically receive a bill for use tax if an amount for use tax is not reported due. If the Department discovers through other means that a person owes use tax on purchases, the person will be assessed tax plus penalties and interest. In addition, a person may be selected for audit by the Department.