Online sales are reportedly up about 12 percent this holiday shopping season. That could be bad news for Michigan tax collectors. Michigan residents are supposed to pay sales tax on items bought online, but few do.
Caleb Booth is a spokesman for the state Treasury Department. He says the state lost out on $328 million dollars in uncollected sales taxes on online purchases in 2009.
"If you’re talking about some of the recent budget deficits that have been around a billion dollars...that 328 million dollars is no small charge when…you’re looking at it from that perspective.’"
Caleb says Congress is discussing ways to improve collection of state sales taxes from online sales, but no new regulations are expected anytime soon. CNBC produced a nice article about internet sales taxes.
A 1992 Supreme Court ruling stated that no out-of-state business could be required to collect sales tax in a state where it does not have a physical presence. There are multiple lawsuits as states fight for the right to collect. Online retailers, like eBay [EBAY Loading... () ] , Amazon [AMZN Loading... () ] and Overstock [OSTK Loading... () ] , stand on the other side.