kingjr3 said:
Since when is this the case? Any links for reference? I have bought several items online tax free and not one of them has indicated to me that I need to pay (or am responsible for) WI sales tax... Also why would states collect sales tax on an income tax return?
Read the fine print on your state income tax form. It's usually called the "consumer use tax" or something similar.
I don't know if every state has it, but it's in every state I've lived in. Sometimes it's a separate form that you are supposed to file with your income tax, sometimes it's part of the main tax form.
Anything you buy where sales tax was not collected by the seller is supposed to be reported on the form, so you can pay it.
In many states, they also want to collect the difference between your sales tax rate and what you paid to other states. For instance, if you live in a state with a 5% rate, and you buy something in a state with a 4% rate, and you paid that 4% to the state you bought it in, you are expected to pay the remaining 1% to your own state on the use-tax form.
Most people don't bother paying this - they simply lie and fill in zero on the form. States rarely audit this kind of thing unless you've bought a big-ticket item (like a car or a boat) from a state that doesn't have sales tax. Some states (like NJ) actually make you sign a statement that the value is accurate so they can (theoretically) prosecute you for perjury if you write down a zero when you should have paid something.
Because of the real hassle of keeping the records needed to pay this, I actually prefer to buy from mail-order vendors that collect sales tax. If they collect it, I don't have to bother with reporting it.