Your right I was confused. I thought we were fighting for no taxes at all on the internet. I actually would rather have a telecommunications tax on my cable/internet bill with all items purchased over the internet sales tax free. Why do we care about such a small tax on a cable/internet bill.....what is it going to be a couple bucks. We are spending a couple hundred a month on internet purchases (depending on how much we buy). I can’t believe that is what we are trying to stop....a little tax on a bill. Good grief if I had known that I wouldn’t jump up and down when it doesn’t pass.......I thought it was a chance to save Americans real money.
The Internet Tax Freedom Act stopped direct taxes on the internet itself.
But, as you have discovered, companies still collect sales tax on purchases made over the internet as long as they have a presence in your state. If the company doesn't have a legal presence in your state, they are not obligated to collect the sales tax. You, instead, owe a comparable use tax to your state.
You should know about another bill which has been introduced in Congress.
As I said, you owe use taxes on purchases made over the internet if the selling company is not obliged to collect sales tax on that purchase. But, since most folks DON'T report those sales, states miss out on millions of dollars of taxes owed to them. They can't force outside companies to collect that sales tax. The bill introduced in Congress would obligate larger interstate companies to collect the sales tax for states in which they do not have a legal presence.
If you're a law abiding taxpayer purchasing product over the internet, that should make no difference to you because you are already paying the use tax to your state.
If you're a retailer selling product on the internet, you may have something to object to. The proposed bill, though, excludes the smaller retailers (if I remember right, you have to have $1 million in interstate sales) and requires that computer software be available to help with the many taxing jurisdictions.