Online Shopping Tax

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With many states facing record budget shortfalls, state governments are looking for opportunities to bring in more revenue. Illinois is one state in support of asking congress for authority to impose a sales tax on goods residents purchase over the Internet from out-of-state retailers.

Alegria Mateus is the general manager at the Rockford-based online auction site, She says taxing Internet purchases would be unfair to her customers and could turn them away.

"I find it hard to believe that it is going to be easy to manage this and be fair to everybody," said Mateus.

But, Rockford's Mayor Doug Scott supports the possible tax and says the benefits could be seen locally in the long run.

"There's not only a lot of sales tax that's lost to all of the states and localities, but it also works to the detriment of our own brick and mortar businesses. You look at the amount of goods that are being purchased now in the Internet versus the ones that are being purchased in our stores. Not only does it have the impact of losing some of those sales tax revenues that don't end up coming back to the states and cities, but it ends up hurting the places in our community," said Mayor Doug Scott\Rockford (D)

The issue will be under dispute until November. That's when the federal government's hold on taxing Internet purchases is set to expire.

According to one report, states lost over $13 billion in un-collected Internet sales taxes. Illinois lost about $530-million.