Eyewitness News investigates taxes and online shopping. Many people find shopping online a convenient way to search for the best deals while checking off their Christmas list. But if taxes aren't included on a purchase, you may have to pay big later.
Everyone loves finding a great deal, but if you don't have to pay taxes on something you buy online, the state says, you still owe. It's trying to get the word out to collect over a billion dollars.
Traditional brick and mortar stores are holiday staples for fresno shopper Debra Johnson.
"The old fashioned way of Christmas shopping to hear the music, to hear everybody talking, and see everybody happy," said Johnson.
But not everyone gets as excited to hit the malls. Online shopping continues to gain popularity. This year's Cyber Monday sales were the highest ever, about 20 percent more than last year's sales according to IBM data.
Nicole LeFore is one of the millions who logs on to find deals. This year she's knocking out about 70% of her shopping list online.
With the internet, you can check all stores in one location, and if it's cheaper to get it on the internet, you can get it then or there," said LeFore.
The State of California is warning people to check their receipts and make sure retailers are charging sales tax. Some smaller retailers out of state aren't legally required to tack it on, but shoppers are required pay something called "use tax." Jaime Garza with the State Board of Equalization explains:
"Use tax is the very same thing as sales tax and you're going to pay it on purchases made out of state from retailers online, mail order, for products that you're going to bring into California to use in California," said Garza, Deputy Director of External Affairs.
Garza says every item adds up and the state is currently missing $1.1 billion in use taxes. The money could go to pay for more teachers or police officers. Every shopper is responsible for reporting their untaxed purchases when they file their taxes. But LeFore doesn't think most people will actually do it.
"We're charged enough taxes as it is. I don't think the average person even realizes if they're being charged sales tax or not," said LeFore.
Garza says the state has made it easy to figure out what you owe, and it's better to be safe than sorry.
We have ways to find people who don't pay use tax. If you're caught not paying you can be charged penalties and interest.
The state says that by educating more people about use tax, more people are now starting to pay it.
Click on the related link for more information on use tax.
Click on the related link for more information on use tax.