ATTENTION, WEB MART SHOPPERS!

FOR ITS MOST FERVENT FANS, THE INTERNET CAN DO NO WRONG--AND THAT'S NOT RIGHT

One of the small, illicit thrills of middle-class life is buying something by mail order and avoiding the sales tax. The mail-order houses had no idea how important this loophole is to their customers until last week, when they revealed an agreement to close it. Now they're backtracking like mad.

The loophole derives from an absurd anomaly of federalism: companies may refuse to collect taxes for states where they have no physical presence. In theory the customer pays the tax directly, but in practice almost nobody does.

States get half their revenue from the sales tax. Mail-order sales lose them an...

Want the full story?

Subscribe Now

Subscribe
Subscribe

Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on TIME.com

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!