Not paying the tax is illegal, but it's a state crime, not a Federal crime. Trying to flaunt Federal tax law can be very, very risky (just ask Al Capone), but

Not paying the tax is illegal, but it's a state crime, not a Federal crime. Trying to flaunt Federal tax law can be very, very risky (just ask Al Capone), but it isn't as big a risk to flaunt state tax laws. That doesn't make it right or risk free, but you won't be looking at Federal prison time because you didn't pay your state's use tax on your most recent Amazon purchase. The amounts in question, though, are usually pretty low. Most people don't spend tens of thousands of dollars on internet purchases, so that lowers the incentive of the state tax agencies to pursue these transgressions with their limited resources. (Remember, they don't have easy access to your out-of-state spending records, so they really don't know whether you've spent $5.00 or $500,000.00 online.) Also, there's the whole burden of proof issue involved here. You want to charge me with a crime? You need to prove beyond a reasonable doubt that I committed that crime. In practice, that means that you'll be flying in a record keeper from Amazon - and putting her up in a hotel - to testify at trial. Maybe someone from Paypal or my credit card company, too. (As a defense attorney, there's no way I'm going to stipulate to that information.) That makes prosecuting smaller violations more costly than it's worth. (For the record, I declare and pay my state's use tax every year on my tax form; I put my internet purchase receipts in a particular email folder to make calculating my costs super easy. Not paying the miniscule tax simply isn't worth the potential hassle to me; lawsuits are a major pain in the rear whether you win or lose, especially when the charges are criminal.)