California's missing online money


[Commentary] There is a widely held misapprehension that the Internet is a tax-free zone. but every book or appliance bought through Amazon.com, every autographed Manny Ramirez jersey or Hannah Montana lunch box bought from a vendor on EBay, carries the same tax obligation as if the item were purchased in a brick-and-mortar shop down the street from the buyer's desktop. It has nothing to do with the Internet Tax Freedom Act, which blocks states and local governments from taxing Web access but doesn't touch sales and use taxes on goods. Californians pay the nation's highest sales taxes, yet by one measure they still don't pay enough. Unless taxpayers come forward on Wednesday in an outpouring of guilt or good citizenship and send the Franchise Tax Board last year's 7.25% sales tax on almost everything they bought over the Internet from out-of-state sellers -- and if the past is any guide, most won't -- California will again be shorted by more than $1 billion in sales taxes owed. That's a significant chunk of the state's budget. Attempts by states to collect taxes that have long been owed but seldom paid can seem like heavy-handed government grabs that hit otherwise law-abiding citizens. But Californians owe it to themselves to be aware of the consequences of their tax laws. What they don't pay out of one pocket may have to be paid out of another, unless we're ready to ask government to do less. But that too can carry costly consequences.

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