I'm curious, in states that have this, how does it work? Is it all online sellers that did not previously collect sales tax or just a few big ones like amazon? Does it show-up on your shopping cart directly or do you have to do forms quarterly say?
Amazon currently collects taxes if they (or the seller) has a physical presence in your state. Apple does the same thing. In my state, I'm required to pay taxes on every online purchase for which taxes have not already been charged to me.
I keep all my receipts for the year and split them between tax paid and not. I pay taxes on all of the online purchases I make during the year. Most people I know, even in states that require collection of taxes for online purchases, don't claim any at the end of the year. Given that out of state companies are under no compulsion to report purchases to state governments, there simply isn't a whole lot of way for states to know whether the information is accurate except through state tax agency audits.
Thanks for the nice explanation. The state I live in requires to pay a use tax either quarterly or as part of income taxes but for a couple of years at least has allowed you to use a table graduated based on income instead of keeping records.
