State Losing Money on Internet Sales Tax

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The state is losing upwards of $260 million because taxpayers are ignoring a state law to tax Internet sales.

When you file your state income tax forms this year, you should tack on money to cover the 6-percent sales tax you did not pay on Internet and mail order purchases. The state is collecting only about $2 million from this so-called use tax when a pot of almost $260 million is thought to be out there.

State Treasurer Jay Rising says there is very little the state can do to collect the money short of auditing everyone's tax returns.

Governor Granholm says she pays her sales tax on out of state purchases, and she wishes others would, too. If they did, she would not have to cut as many state services, and a sin tax increase on tobacco and liquor might not be needed.