Friday, September 17, 2010

States working harder to collect online sales taxes

Image: South Carolina tax form

With budgets in crisis, enforcement efforts gather steam

“The tax is still supposed to be paid, however. And if the seller’s not responsible, then you, the buyer, are. In general, you’re supposed to voluntarily file your own report and pay the standard tax on your out-of-state online purchases. (The appropriate forms are available on state tax agency websites, revenue officials are happy to remind you.)

But it turns out that the vast majority of Americans are completely unaware of those rules, so the forms don’t get filed and the taxes don’t get paid — to the tune of $8.6 billion in 2010 alone, the National Conference of State Legislatures estimates.

That’s a big problem, because sales taxes (as they’re called when they’re handled by a  retailer) and use taxes (as they’re called when the customer handles them after an out-of-state transaction) most often pay for schools and public safety.”

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