Taxing Honesty

50 Pages Posted: 1 Apr 2015 Last revised: 5 Jan 2016

See all articles by Adam B. Thimmesch

Adam B. Thimmesch

University of Nebraska College of Law

Date Written: March 30, 2015


It is commonly accepted that state use taxes, most notably those that are due on Internet purchases, are largely unenforceable against individual consumers. Consistent with that view, states have focused their enforcement efforts on forcing retailers to collect those taxes at the point of sale, and taxpayers have maintained nearly complete indifference toward remitting the tax of their own accord. This combination of factors has transformed the state use tax into a de facto tax on honesty — a tax with which only our most principled, risk-averse, or perhaps foolish even attempt to comply. The current structure of these taxes is further troubling because compliance is a practical impossibility. Unfortunately, however, academic attention to the state use tax has focused almost exclusively on whether and under what conditions states should be allowed to compel vendors to collect that tax. This Article takes a different approach and evaluates the current structure and enforcement of state use taxes from economic, moral, and psychological perspectives. That analysis establishes that states’ current vendor-centric approaches are problematic and that states must instead adopt consumer-centric approaches that focus on the design of the tax and on its enforcement against individual taxpayers. The Article concludes by addressing potential arguments against that approach and by outlining the precise changes that are required to salvage the validity of the use tax.

Keywords: use tax, tax compliance, procedural justice, Rule of Law, internet sales tax, Marketplace Fairness Act

JEL Classification: H20, H24, H26, H29, H70, H71, H73, H77, H79

Suggested Citation

Thimmesch, Adam B., Taxing Honesty (March 30, 2015). 118 W. Va. L. Rev. 147, Available at SSRN:

Adam B. Thimmesch (Contact Author)

University of Nebraska College of Law ( email )

103 McCollum Hall
P.O. Box 830902
Lincoln, NE 68583-0902
United States

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