State To Add Line On Income Tax Form For Reporting Online Purchases

PITTSBURGH (KDKA) -- Growing faster than legislative abilities to regulate it, the world of internet retailing has put the traditional retail at a competitive disadvantage by not having to charges sales tax.

That's not to say you won't face sale taxes when you purchase online. As the Best Buy website indicates, "Best Buy is required to collect sales tax where it has a physical presence."

The same is true for any other retailer with stores in Pennsylvania.

So if you're not charged the tax, do you still owe it?

"I think everybody knows when they point and click that they're beating 6 or 7 percent," CMU Economics Professor Robert Strauss said.

Strauss is an expert in the use tax and says people who make online purchases that are not charged sales tax are supposed to send in the 6 percent use tax to the state.

"As long as there's no enforcement there's no compliance and no onus, then everybody sort of forgets," he said.

To help us remember, the income tax form next spring will have a line to estimate how much you've spent online or mail order and then the use tax you owe.

"It will bring in a modicum of money maybe $5-7 million," Strauss said.

But the state revenue department readily admits it is voluntary compliance because the online and mail order retailers like Amazon have no obligation to report your purchases to Pennsylvania.

"The odds are that the state is not going to be able to audit you," Strauss explained.

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