States Look to Collect Tax on Internet Sales

Many are asking people to fess up when they fill out their IRS forms
By Jim O'Neill,  Newser User
Posted Feb 28, 2008 10:26 PM CST
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(Newser) – As tax time draws near, more Americans may be stumbling upon an extra line on their state returns, Forbes reports. About half of state governments—including New York, Michigan, California, North Carolina, and Ohio—are trying to collect their fare share of sales taxes from Internet sales. Chances remain slim, though, that most buyers will admit—or pay—anything.

With no federal Internet sales tax, states are on their own in efforts to collect from residents who buy items from out-of-state vendors via the Internet; most states are asking residents to pay voluntarily —without much luck. A Minnesota survey of 19 states showed just 1.6% of taxpayers acknowledged they owed anything. (Read more retail stories.)