States Look to Internet Taxes to Close Budget Gaps

Sunday, 19 Jun 2011 10:11 AM

 

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AUSTIN, Texas (AP) — Cash-strapped state governments have one place they could get $23 billion if they could agree on how to do it: Internet retailers such as Amazon.com.

Internet retailers have to collect sales tax only when they sell to customers living in a state where they have a physical presence. When consumers order from out-of-state retailers, state law requires them to pay the tax. But it's difficult to enforce and rarely happens.

That means the seller is absolved of responsibility, buyers save 3 percent to 9 percent, and the state loses revenue.

California alone estimates it loses at least $200 million a year in uncollected tax from online sales.

Lawmakers have proposed or passed legislation to change the law in more than a dozen states, and some are now seeking federal action.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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