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New law to collect sales tax from Internet purchases

07:28 AM PDT on Friday, May 16, 2008

By ROBERTA ROMERO / KING 5 News

SEATTLE - Shopping online from out of state retailers and avoid paying sales taxes is a common way people try to save money, but that is about to change. A new law to collect more sales tax from Internet sales goes into effect soon.

New law to collect internet sales tax in Washington

"I feel like they have enough taxes as it is and we don't need anymore," said Kevin Gunter, Internet shopper.

If you shop online hoping to avoid Washington state sales taxes, better do it before July 1st. That's when a new state law goes into effect regarding e-commerce taxes. The law ensures state and local jurisdictions will get their money.

About 1,000 companies will now collect and distribute sales taxes. The state expects to collect more $37 million in 2009; local districts more than $11 million. This strategy is also supposed to even the playing field between in-state and out-of-state retailers.

"I think this is fair for Washington business, fair for Washington tax payers because they get the revenue closer to their home," said Rep. Jim McIntire, D-46th District.

Which Internet companies will start charging taxes is not known yet. The 1,000 companies who have volunteered to collect taxes have been given amnesty by complying with the new law. The state promises not to sue them for back taxes.