Surprise! Paying Sales Tax On Internet Purchases Is Required

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Jan McMinn runs Sierra Le Bone, a pet supplies store in Carson City.

Step inside and you''ll find just about every thing a dog or cat owner would want, including a do-it-yourself dog wash and free, knowledgeable advice from Jan herself.

Buy something here and you'll be paying Nevada sales tax. But Jan has competition and it's not just from the big box store down the street.

It's on the internet where just about everything she sells is available and, even if the sales price is the same, the sales tax puts her at a disadvantage.

"I'm like everyone else,"she says. "I don't like paying sales tax, but fair is fair."

Carole Vilardo of the Nevada Taxpayers Association agrees,.

"She's paying all the taxes. She's paying the business tax. She's collecting sales tax and remitting. She's paying use tax. She's paying property tax."

Things may be changing. A bill before congress would require internet retailers to collect the local sales tax from their buyers and return in to the states.

Estimates are it could mean $100 million dollars a year or more to cash strapped state and local governments.

More than that, it would level the playing field for local businesses who have pay those local taxes, pay rent, keep the lights on, all while creating jobs here at home.

Often she says, customers here will even do their window shopping at a local store, then make the purchase on line and that's helped put some Nevada businesses under.

What may surprise all of this is that we're already required by state law when we buy something on line to go to the Nevada Taxation Department's website, download a form from the Nevada Tax Department and pay sales tax on internet purchases.

Businesses, who are audited, do. Virtually all of the rest of us don't.

So, we're all tax scofflaws?
"Oh Lord yes," says Vilardo, who adds almost no one knows this.

Besides, she says, "How could you possibly audit? You know people say have the Department of Taxation audit. You're going to audit 2 million people? What are you going to do? Go to peoples' houses and say let me see your receipts?"

It is, she notes, not a new tax, but merely an issue of collection.

Senator Reid is expected to bring the bill up for a vote May 6 and it's expected to pass with bipartisan support in the Senate. The House may be another matter.

The Nevada Legislature has been taking testimony on Senate Joint Resolution SJR5 urging passage.