Internet State Sales Tax - Here It Comes
When you purchase something online, you're supposed to pay sales tax on that purchase directly to the state when you pay your income taxes. In reality, very few people do this and up until now, states have rarely enforced it. Thirteen states -- Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota, and West Virginia -- will take the first step to changing this in hopes of collecting a portion of the $15 billion a year in lost revenues they claim results from non payment of sales taxes from Internet purchases.
While the first step doesn't have a lot of teeth, it's a warning to all consumers that the Internet won't be a sales tax free haven forever. beginning this fall the thirteen states will start to "encourage" (although not demand) that online businesses collect sales taxes just as any brick and mortar business is required to do.
Why should the businesses comply if the collection of sales taxes is only encouraged at this point? The "encouragement" comes in the form of a threat. If businesses register and begin collecting sales taxes this year, they'll qualify for a year amnesty from the possibility that the states may seek back taxes for online purchases. If they don't, the states have the option to try and collect back taxes for online purchases.
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