"North Carolina already taxes internet sales. When one files his NC tax return, he is supposed to declare and pay a "use tax" on all internet purchases or telephone catalog purchases for which taxes were not charged by the vendor. I understand a number of other states also do this."
I believe I noted this on the Massachusetts tax forms (shocking, I know). I recall reading somewhere (FR?) that it is only a small percentage of filers who actually report this. Even the tax collectors understand that it is basically a voluntary act. The only way I could see this being a problem for someone who doesn't report the internet/catalog purchases is in an audit situation, but even then can they inquire into your actual purchases?
"North Carolina already taxes internet sales. When one files his NC tax return, he is supposed to declare and pay a "use tax" on all internet purchases or telephone catalog purchases for which taxes were not charged by the vendor. I understand a number of other states also do this."
I believe I noted this on the Massachusetts tax forms (shocking, I know). I recall reading somewhere (FR?) that it is only a small percentage of filers who actually report this. Even the tax collectors understand that it is basically a voluntary act. The only way I could see this being a problem for someone who doesn't report the internet/catalog purchases is in an audit situation, but even then can they inquire into your actual purchases?
The Sales/Use Tax auditors are not likely to show up at an individual's door unless someone tries to sneak a car or other large dollar amount purchase in without paying Use Tax. In theory, Sales Tax is the business collecting the customers' Use Tax and forwarding it to the State.
Walmart and Eddie Bauer collect Sales Tax on internet purchases because they have a "physical presence" (aka "brick and mortar" store) in most states and are required to collect Sales/Use Tax for those states.
The US Supreme Court visited internet sales with Quill Corp. and essentially said it's up to Congress to decide the issue whether a company has to collect Sales/Use Tax on sales shipped to states where the company doesn't have a physical presence. If a National Sales Tax is enacted, the state Sales/Use Tax will probably be included.