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Many shoppers not aware of online 'use tax'

November 29, 2009 12:00:00 AM PST
You may want to keep track of your sales tax when making those online gift purchases. California lawmakers are currently considering a bill targeting online retailers that are not collecting state sales tax.

Consumers who fail to pay this tax are actually breaking the law, but many people aren't aware of it or do not report it on their yearly income tax forms.

"Whether it's over the phone, through a catalog or via the internet, you owe the 'use tax' if the retailer doesn't collect the sales tax," said Anita Gore of the California Board of Equalization.

The state estimates California consumers pay less than one percent of what is owed in "use tax", resulting in more than a billion dollars of lost revenue each year.

The typical household owes about $47 a year in unpaid use tax.

You could get penalized 10 percent plus interest if you're caught.


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