Local Politics

New state revenue chief vows to collect sales tax on online buys

Posted November 30, 2010

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— North Carolina Revenue Secretary David Hoyle is on a mission to collect the sales tax on purchases North Carolina residents make from online retailers.

Under federal law, Internet companies aren't required to collect sales tax unless they have a physical presence in a state. A study by the University of Tennessee estimates that North Carolina will lose $186 million in revenue this year because online purchases didn't include sales tax, and researchers said the amount is expected to grow to $237 million by 2012.

With the state facing budget deficit of $3 billion to $4 billion next year, Hoyle said he wants that money.

Money generic, dollars New state revenue chief vows to collect sales tax on online buys

"A lot of these online – well, all of these online retailers – owe us the courtesy of collecting our sales tax," he said Tuesday. "I think some of these companies are building huge liabilities for themselves when they refuse to collect our sales tax."

States have struggled for years with collecting sales tax from online purchases. North Carolina taxpayers are supposed to report uncollected sales tax on their tax returns, but officials say only a small fraction of what is owed is actually paid.

Following a WRAL News investigation, state university leaders vowed to push their online vendors to charge tax. North Carolina also is embroiled in a court battle with online retail giant Amazon to obtain information about its sales to state residents.

"We want to go back as far as we can, go back to when they started shipping stuff into the state," Hoyle said. "We're going to go after it as hard as we can."

Amy Schroeder of Wake Forest said she does about 75 percent of her shopping online because of the convenience. Like many shoppers, she said her buying habits are shaped by savings, whether it's through comparison shopping, sales, shipping costs or sales tax.

"If the price of the purchase is increasing because of the sales tax, then I'll look for sales or we'll table the purchase," Schroeder said.

Still, as much as she likes online deals, she doesn't argue with the state's urge to collect sales tax on such purchases and says she is willing to pay up.

"Why not? It's almost like stealing money. So, let's get it back," she said.

42 Comments

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  • dwr1964 Dec 1, 2010

    Mustang....I completely agree with your statement. That being said, don't you think it is demeaning to you personally, when you use improper english? You folks from NC are continually claiming to be among the most literate of the country. I beg to differ. It is not only your statement, but rather, those of so many people from NC.

  • Mustange Dec 1, 2010

    Ask thim how many times THEY purchased something online and didnt pay the tax.

  • Mustange Dec 1, 2010

    North Carolina Has no right to tell a businees outside of this state to include our sales tax to their merchandise. I hope that AMAZON and all others fight it as far as it needs to go. NC has no right to do that outside of their state. And another tax joke is if you buy and sell a car it gets taxed everytime its sold if its 5 times in one year its 5 collections biggest double taxation rip off.

  • dlb800 Dec 1, 2010

    What do you expect when you have democrats telling everyone that the we can't *afford* the Bush tax cuts. They also say that it's giving money to millionaires and billionaires. I can't afford the money you make, so you should give it to me. :)

  • dwr1964 Dec 1, 2010

    Here we go again. The government is mad because they are missing out on millions of dollars that they can use to give raises to themselves. If there is a dollar out there somewhere, uncle sam wants his cut, but when that same government decides to spend that money on things that are completely wasteful, we, as the people, cannot even question why. If we do ask questions, or complain, we are told that the government knows what is best for us even if we don't. We need a government that honestly cares about the people. This has not happened since at least the 1700's.

  • ohmygosh Dec 1, 2010

    He's got it wrong. The emphasis should be on making NC stores the place to buy online. More revenue = more taxes.

    However, the local stores who simply won't or can't (because of ignorance) won't sell on line are doomed. This leads to less revenue.

    Also what about the Amazon court case where NC lost? Why is he ignoring that. Simply put, the big online stores have lots more $$ to spend on legal fees than NC and will prevail. Why waste taxpayer money on it.

  • EvilSithLord Dec 1, 2010

    -North Carolina will lose $186 million in revenue this year because online purchases didn't include sales tax-
    How about taxpayers lost? What if people stop buying online altogether? What rock will Mr. Hoyle move to get his precious tax money? Sales Tax Hike? Window-shopping tax? Shopping mall parking lot-tax? Is there an end of this madness? State government should focus on job creation and taxes will pay itself, rather than wasting man-hours and taxpayers money in order to squeeze more money us.

  • 6079 SMITH W Dec 1, 2010

    Gee, Amy....it is OK to say you don't believe the Federal, State, County, and City "governments" have a "right" to ream us out for every cent that is left over from basic survival. The Telescreens in every home that monitor our every move ain't quite a reality....YET. Keep thinking like that, and they WILL be. ;(

  • newsmonkey Dec 1, 2010

    This WRAL article does a disservice to its readers by not explaining that USE TAX is due on ALL items ordered via internet, phone or catalog -- and by not pointing out that what Hoyle wants to make Amazon do is ILLEGAL (against Supreme Court rulings). It is ILLEGAL to force any biz to collect a state sales tax when it has no physical presence within that state.

    However, the way around this is the very LEGAL requirement that buyers file the USE TAX on their NC state taxes. This is the law & has been for decades. Many people do not realize - they assume that no tax is due at all on interstate commerce. This is false. "Amy Schroeder of Wake Forest" should be paying either sales tax OR use tax on EVERY purchase. To say that it's cheaper to buy online because there's no sales tax is erroneous. It simply means that the buyer is breaking the law by not filing the use tax themselves. Go look it up at the NCDOR website.

  • lestergillis Dec 1, 2010

    What else is new. The State always spends more then they have so they resort to strong-arm tactics like this to pay for stuff we did not want to begin with! Have you ever noticed how many State-owned cars are on the road? Have you ever noticed how much of West Raleigh the State owns? I could continue for hours...
    I was born and raised in NC but I VOW to leave this state in favor of another state that is more fiscally responsible (FL or TX)or any other state that does not have the taxes NC does ie: State income tax, personal property tax on cars, etc. The State government is full of crooks. Does anyone remember The State taking Sales and Use taxes from the counties in 2001 to pay for a budget shortfall. What ever happened to that? THEY RAISED THE SALES TAX TO COVER IT! If you or I did something like that we would be in jail and owe The State for the rest of our lives.

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