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Old 04-09-2012, 12:23 PM   #31
Kali Yuga
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Quote:
Originally Posted by HarryT View Post
there was a state tax called "use tax" which is the equivalent of sales tax....
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.
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