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Shopping online? Sales tax is a definite maybe.(Up front: news / trends / advice)(Brief Article)

Consumer Reports

| December 01, 2004 | COPYRIGHT 2004 Consumers Union of the United States, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

If you shop online and the seller doesn't include sales tax, does that mean you don't have to pay it? Not quite.

Most online retailers have managed to avoid asking for sales tax by leaning on a 1992 U.S. Supreme Court ruling that a state cannot force companies with no major facility in that state to collect sales tax from residents. (A major facility generally means a warehouse, headquarters, or retail outlet.) Thus, retailers ask for sales tax only in some states.

But that doesn't let you off the hook. If your state or local government levies sales tax and you go online to buy a taxable item that you'll use at home, you owe a "use" tax. The fact that the e-tailor may not have collected the tax doesn't matter. States have different methods for collecting use taxes. Some let you pay online, while others require a separate tax form and still others let you report it on the individual income-tax form.

Ignoring that tax means ...

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