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So, it's been a week since tax time ended. And before you file away another year of 1040s, one quick question: You remember that little line on the Massachusetts Income Tax form? Line 33. The one that says, "Tax Due on out-of-state purchases," including online purchases? How many of you reported any online purchases at all?
Fewer than 2 percent of Massachusetts residents report online purchases, even though many of us, at some point in time, have bought something on the web.
And maybe you do precisely because by buying online, you can avoid paying that 6.25 percent state sales tax. Especially at an e-commerce giant like Amazon, where you can buy everything from books, to baby clothes, to artisanal coffee beans. When you click on "check out," who doesn't like seeing that zero tax line item on the receipt?
Local retailers, that's who. The Retailers Association of Massachusetts is calling for a bill that would force Amazon and other e-commerce sites to collect state sales taxes. If passed, the retailer's association says the legislation could level the playing field when it comes to their ability to compete with online giants.
This is an enormous issue in almost every state in the country right now. In Massachusetts, the sales tax loss from unreported online buying could be more than $330 million this year. But it also raises a bigger question about taxes and commerce in the 21st century. What, if anything, should states do when by virtue of the internet, even the simple act of buying a book can be an interstate issue?
This segment aired on April 24, 2012.
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