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At tax time, state governments push to tax Internet sales


States push to tax Net shopping
April 12, 2006, 11:27 AM PDT

Did you buy anything through the Internet last year without paying sales 
tax at the time?

If you did, state tax collectors warn that you'd better say so by April 
17 and write a check--or else.

Online purchases from sites like Amazon.com and eBay may seem to arrive 
in a state of untaxed bliss. But the law actually requires shoppers to 
pay their own state's sales tax rate--the concept is called a "use 
tax"--and voluntarily cough up the exact amount owed each year at tax time.

Tax bureaucrats for years have lamented the difficulty of collecting use 
taxes on catalog and mail order sales. Now, with online shopping growing 
rapidly and nearing $100 billion a year in consumer sales, tax 
collectors are adopting more aggressive tactics. [...]

"If you've written zero or left it blank, during the audit we're going 
to make you produce your financial records, bank statements, credit card 
statements," said Michael Bucci, a spokesman for the New York Department 
of Taxation and Finance. "If we find out you have made purchases you 
haven't reported to us, not only are you going to be liable for the 
amount owed, the tax liability, but also interest and penalties, 
which...could be up to three times as much as what you actually owe." [...]

Posted by Declan McCullagh on Apr 12, 2006 in category economics

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