Quote:
Originally Posted by HarryT
there was a state tax called "use tax" which is the equivalent of sales tax....
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Yes, use tax is basically the same thing as sales tax.
In theory the consumer ought to report online purchases, in practice the State won't see a penny unless the retailer collects it at the time of sale.
There are lots of quirks to the sales tax collection laws. IIRC California drafted a law that said if the retailer performs any work in CA, the retailer must collect sales taxes regardless of the location of the corporate headquarters. As a result, Amazon pulled a bunch of affiliates in order to avoid collecting CA sales taxes.
Small businesses also occasionally get zapped for unreported/unpaid use taxes.
Walmart in particular has pushed the issue, since it's a huge competitive advantage for Amazon not to collect sales taxes. The online retailers are starting to see the writing on the wall, and are now pushing for a federal standards on sales tax collection to simply things.