Collecting Use Taxes With a few exceptions, most states think that collecting their own use tax from their own residents is too hard. The reason that some out of state sellers collect use taxes is that they have some physical presence in your state, either an office, employees, or property. However, sellers that have no such presence do not wish to collect use taxes for the states. Consumers do not know about the tax and many resent being forced by the seller to pay it. Sellers must pay the tax even if the buyer doesn't include the tax amount in a payment.
Tax rates vary in different locations, even within a state.
Each state taxes different products and has different execeptions, exemptions, and requirements. Sellers are audited by the states when they collect use taxes. Audits are time-consuming and can result in penalties if the seller has not complied with each state's confusing tax requirements, exemptions, and exceptions. This fear is simply an extension of the state's concern over mail order sellers. While there is a reference to use taxes in the California Personal Income Tax booklet, there is no attempt to collect this tax on the income tax form itself.