States working harder to collect online sales taxes

In many states, residents who buy online are expected to complete
complicated forms, like this one from the South Carolina tax return,
and voluntarily send in sales and use tax payments.

With budgets in crisis, enforcement efforts gather steam  

Alex Johnson


It’s too early to know exactly how much the Nebraska chapter of the March of Dimes raised this week at its annual Signature Chefs Auction in Omaha, but odds are that more than 10 percent of the charity’s proceeds are going straight to the tax man.

That’s because the March of Dimes went online when it bought about 4,000 T-shirts from a Florida vendor to give to donors during its March for Babies Walk last April. The charity often buys supplies and other materials online, and it also raises money online by selling items at auction — racking up a big tax bill in each case.

“We didn’t know that,” said Rosemary Opbroek, director of the Nebraska chapter. “We wish the law was different. It is taking money away from helping … babies.

Specifically, it is taking away about $26,000, the amount the State of Nebraska says the March of Dimes owes for unpaid taxes on the April purchase and other online transactions over the past five years.

Opbroek acknowledged that “we owe the money,” which she said would have to come out of proceeds from this week’s fundraiser. Assuming the final tally is the same as last year’s, about $215,000, the state tax bill will eat up nearly 13 percent of the donations.

The law the March of Dimes stumbled over is similar to statutes in most other states — arcane regulations that mean you are probably a tax scofflaw, along with just about everybody else who has bought something online. That’s roughly 80 percent of all U.S. adults, Nielsen Online calculates.

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