State Says Online Buyers Owe Tax

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As Internet commerce continues to flourish, California tax officials have a piece of advice: Save your online sales receipts, the Sacramento Bee reports.


You’ll need them to report your “use tax,” the money that the state collects on taxable purchases made from out-of-state sellers.


The California State Board of Equalization wants to tighten up use-tax collections, which totaled just $5.5 million. Officials estimate that another $1 billion went uncollected.


“It’s the law and it’s been the law since 1935,” said board spokeswoman Anita Gore.


The use tax would apply, for example, to a toy ordered via the Web, over the phone or by mail from an out-of-state vendor and shipped to California. While a toy store here would add sales tax to an over-the-counter purchase, the outside supplier would not.


The California buyer must declare the purchase and pay the use tax, equal to the sales tax where the item is consumed, given away or stored.


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