A friend just told me that the NY Democrats have passed a bill which would allow the state to tax all purchases and sales made on the internet. This would include Amazon and E- bay. Millions of Americans are using the internet to stretch their dollars in this failed economy. He told me other states are showing interest in this. It seems to me that Democrats love their taxes more than their constituents. Be sure to watch what your representatives are up to. They will be sneaking behind out backs to get this tax too

Every state would like to tax online transactions, but they can't do that without Congress, which so far hasn't acted on it. You probably know that state tax can be applied to an online seller if the seller has mortar-and-brick facilities in that state, as does Amazon in some states.

Here in AZ, the legislature briefly asked taxpayers to state, on their AZ tax returns, an estimate of how much they spent in online purchases that year. Some people put down $100 and the state calculated that amount in figuring out your bill. But AZ couldn't apply a tax to every transaction. Most people ignored it. It was revoked, I believe.

Update: Last night I went on Amazon to buy a new camera--either Canon SLX 170 or 160--identical except for power supply. Amazon would have charged me $11.75 sales tax for the 170, but no sales tax for the 160. Only conclusion I came to: Amazon probably ships the 170 from a warehouse or supplier here in Arizona, but the 160 probably ships from out of state.

That or it could be like here in Mass, some things aren't taxed such as clothing if its under $175, if it's over $175, tax is only added to the value over 175.