States seeking sales tax for Internet purchases on clarkhoward.com

Purchases you make on the Internet are tax free, right? Wrong! The states are at it again trying to find new sources of tax revenue as we stare down a recession. They've now turned to trying to get the word out that you're legally required to pay sales tax on Internet purchases -- unless, of course, you live in a tax-free state. That's news to most people.

The courts have decided that web merchants are not responsible for collecting taxes unless they have a domicile in the state where the purchaser lives. But you still owe the tax. North Carolina has been aggressive about trying to collect. Some states are even participating in cooperative efforts where they'll rat you out to other states. We're not talking about something you buy for $12 on Amazon; we're talking about something you might buy for $12K online. 25 states now have a line on their income tax forms to collect sales tax on Internet purchases you've made over the past year. Consumers are expected to keep a log of all their e-commerce transactions and then report them!

What others are saying

Internet Taxes
Just what we need. Government taking more of our money and then squandering it on nonsense programs. Will they ever stay out of our pocketbook?
By Michael @ 08/01/08 10:56:01 PMreport abuse
FairTax
The FairTax is what we need.
By Brian @ 08/01/08 08:31:35 PMreport abuse
Free Credit Freeze For 65 Year Olds
How do I apply for my free credit now that I am 65 years old?
By J R @ 08/01/08 04:08:09 PMreport abuse
Ever heard of the IRS?
"And how are they going to prove it if you do and also inforce it???"

Well, tucked away in that housing bailout bill that W just signed is a new regulation that requires credit card companies to report transactions to the IRS. For now it's limited to accounts that total more than $10K a year, but I expect once they get the computers up and running, every last penny we spend will be tracked.
By Eric J @ 08/01/08 03:52:49 PMreport abuse
internet tax
the tax should be added at the time of purchase at that states rate (if any)
not the state you live in.
By Mike @ 08/01/08 01:42:49 PMreport abuse
online tax
The TAx should be according to the state purchased from not the state in which you live!!!
By Mike W @ 08/01/08 01:39:19 PMreport abuse
the government's solution...
they need more money? cut the pork, careless spending and worthless programs. it's that simple.
By Chris @ 08/01/08 12:56:11 PMreport abuse
sales tax
it's too bad states don't put 10% of the time and energy into more efficiently spending the already bloated tax receipts they get from their weary minions. spending at the federal, state and local levels over the past 10 years has skyrocketed way beyond levels of population growth and inflation.
By brian @ 08/01/08 11:41:13 AMreport abuse
internet taxes
I am not one for greater taxes, but something just doesn't make sense.

When you purchase something from a catalog, you usually pay a sales tax. An internet purchase is just a catalog purchase from an online catalog. I never understood why the internet is treated differently. Both methods should be subject to the same laws.
By Jim @ 08/01/08 10:53:25 AMreport abuse
Internet Tax
When you add gas and sales tax to local purchases, there are many times when purchases on the Internet are cheaper even after the so called "shipping and handling" charges. Some merchants on the Internet have bowed down to state governments by trying to charge sales tax. That usually prices the merchant out of the market.

Election day is coming. We voters will have the last laugh!
By PJ @ 08/01/08 05:19:23 AMreport abuse
Never Happen
It will never happen. Hundreds of millions of transactions a year....Dream on. If the government gets involved, large sales transactions on the web will go underground on secret websites, untraceable payments will be used similar to those used on gambling websites, goods can be shipped to a friend or relative.
By Ken @ 08/01/08 02:49:49 AMreport abuse
Internet taxes
And how are they going to prove it if you do and also inforce it???
By Darlene K @ 07/31/08 08:41:12 PMreport abuse

Internet Taxes

Just what we need. Government taking more of our money and then squandering it on nonsense programs. Will they ever stay out of our pocketbook?

By Michael @ 08/01/08 10:56:01 PMreport abuse

FairTax

The FairTax is what we need.

By Brian @ 08/01/08 08:31:35 PMreport abuse

Free Credit Freeze For 65 Year Olds

How do I apply for my free credit now that I am 65 years old?

By J R @ 08/01/08 04:08:09 PMreport abuse

Ever heard of the IRS?

"And how are they going to prove it if you do and also inforce it???"

Well, tucked away in that housing bailout bill that W just signed is a new regulation that requires credit card companies to report transactions to the IRS. For now it's limited to accounts that total more than $10K a year, but I expect once they get the computers up and running, every last penny we spend will be tracked.

By Eric J @ 08/01/08 03:52:49 PMreport abuse

internet tax

the tax should be added at the time of purchase at that states rate (if any)
not the state you live in.

By Mike @ 08/01/08 01:42:49 PMreport abuse

online tax

The TAx should be according to the state purchased from not the state in which you live!!!

By Mike W @ 08/01/08 01:39:19 PMreport abuse

the government's solution...

they need more money? cut the pork, careless spending and worthless programs. it's that simple.

By Chris @ 08/01/08 12:56:11 PMreport abuse

sales tax

it's too bad states don't put 10% of the time and energy into more efficiently spending the already bloated tax receipts they get from their weary minions. spending at the federal, state and local levels over the past 10 years has skyrocketed way beyond levels of population growth and inflation.

By brian @ 08/01/08 11:41:13 AMreport abuse

internet taxes

I am not one for greater taxes, but something just doesn't make sense.

When you purchase something from a catalog, you usually pay a sales tax. An internet purchase is just a catalog purchase from an online catalog. I never understood why the internet is treated differently. Both methods should be subject to the same laws.

By Jim @ 08/01/08 10:53:25 AMreport abuse

Internet Tax

When you add gas and sales tax to local purchases, there are many times when purchases on the Internet are cheaper even after the so called "shipping and handling" charges. Some merchants on the Internet have bowed down to state governments by trying to charge sales tax. That usually prices the merchant out of the market.

Election day is coming. We voters will have the last laugh!

By PJ @ 08/01/08 05:19:23 AMreport abuse

Never Happen

It will never happen. Hundreds of millions of transactions a year....Dream on. If the government gets involved, large sales transactions on the web will go underground on secret websites, untraceable payments will be used similar to those used on gambling websites, goods can be shipped to a friend or relative.

By Ken @ 08/01/08 02:49:49 AMreport abuse

Internet taxes

And how are they going to prove it if you do and also inforce it???

By Darlene K @ 07/31/08 08:41:12 PMreport abuse

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Jul 31, 2008 -- States seeking sales tax for Internet purchases

What others are saying