New York And California Urge Residents To Pay Sales Tax On Online Purchases

by Mike Godfrey, Tax-News.com, Washington

05 March 2004

According to reports in the US media this week, New York and California have become the latest states to officially require their citizens to report for tax purposes on purchases made over the internet or out of state.

The Associated Press revealed on Wednesday that the two states have added a section to their tax return forms requiring taxpayers to estimate their liability for purchases of this nature, or face audits of their tax affairs.

However, according to the AP, observers have suggested that few returns are likely to be audited as a result of this new provision, and taxpayers in the two newly affected states do not appear to be greatly concerned by the change.

Tax officials in New York are reportedly expecting an increase in revenue of just $2.5 million as a result of the amended tax return.

However, the Californian authorities are more optimistic, suggesting that the change will bring the tax to the attention of California residents, and will help to collect an extra $13 million this year.

Speaking to the AP, California Equalization Board spokesman, Vic Anderson observed that:

"That's always a problem, making people aware of this liability. It's one of the most misunderstood taxes out there."

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