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Taxing online shopping

Are shoppers feeling the sales tax pinch after Maryland's sales tax went up 20 percent in January (from 5 percent on purchases to 6 percent)?

Some state governments certainly are.

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In the past, we've discussed the benefits of online shopping here, with the tax savings being one of the key points --- avoiding the sales tax on everything from electronics to clothes to even some groceries.

This burns states with deficits, including New York, which has tried to lay a claim to a share of sales made by its residents in cyberspace or elsewhere.

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They put a line on state tax returns asking people to pay levies on their online purchases and have even taken down license plate numbers of NY residents parked at Jersey shopping malls.

Now New York has taken on Amazon.com, reports the New York Times (via Consumerist) and Marketplace.

The state now requires online retailers to collect and pay sales tax even though they have no physical presence there. Officials argue they can because Amazon affiliates do have physical locations in the Empire State, so they can and should charge tax.

Stay tuned for legal fireworks. And p.s. to any Maryland lawmakers planning to stake out Delaware outlets: NY eventually stopped stalking out-of-state shoppers. Too big brotherish. 

(photo: Elizabeth Malby/Baltimore Sun)

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