Net's no longer a haven from sales taxes

Several large retailers this week began collecting sales tax on Internet purchases.

The move arose from an agreement among about 38 states and the District of Columbia that went into effect this week. The deal was struck last fall after states complained that they've been losing billions of dollars in tax revenue as online sales rise. In exchange for signing onto the agreement, the retailers will not be held liable for back sales taxes they may owe, according to people familiar with the agreement.

Those involved would not say which retailers agreed to the deal, but retailers including Toys "R" Us, Wal-Mart and Target recently posted new policies on sales taxes. Amazon.com, which has partnerships with Target.com, MarshallFields.com and Mervyns.com to sell items online, notified customers of the change through a posting on its site.

"Effective February 2, 2003, target.direct and marshallfields.direct will be required to charge sales tax in all states other than Alaska, Hawaii, and Vermont. The new collection requirements will apply to all orders shipped and charged on or after February 2, 2003, even if your order was placed prior to this date," the posting said.

Many online retailers have avoided charging customers sales tax because companies are not required to do so unless they have a physical presence in a customer's state. Americans are supposed to pay taxes voluntarily on items they order from Web sites and mail-order companies that are located outside the state in which they live. But very few people do.

View: The full story