But that tax break may soon be a thing of the past. With their budgets bruised by the slumped economy, state governments are no longer willing to keep their hands to themselves when it comes to online commerce and tax collection.

States, wanting to get their share of the $80 billion spent online last year, are hoping to persuade Congress to pass legislation that would require online and catalog retailers to collect sales tax at the time a purchase is made, handing it over to state governments and relieving them of the headache of attempting to recover it themselves.

North Carolina has been trying to collect sales tax on Internet purchases since 1999. That's the year it added a line to state income tax forms for reporting use tax -- sales tax becomes use tax when it's not collected at the time of purchase. People can either keep all their receipts and compute the amount owed or they can calculate an estimated amount of tax to pay that is based on their income.

Last year, North Carolina collected $4.6 million in use tax. Officials estimate the state is owed as much as $200 million more. Andrew Sabol III, director of North Carolina's sales and use tax division, says that while the state's official estimate is around $140 million, it could easily be as high as $200 million, even more. "Think about how many education or law enforcement positions that could pay for," he said. "It's real dollars."

In other words, the voluntary reporting of use tax isn't working very well.

Take Rusty Kroboth, for example. An information technology manager of the Raleigh Convention and Visitors Bureau and drummer for a band called Malibu Station, he buys musical equipment online regularly.

The selection of speakers and amplifiers is wider online than what he could find locally, and he pays for shipping instead of paying sales tax. He hasn't decided what he's going to report on his taxes this year. "Honestly, I don't feel I should pay more taxes," Kroboth said. "I kind of thought I paid enough already."

But folks like Kroboth aren't the state's only problem. Right now, it can require retailers to collect sales tax from N.C. buyers only if the retailer has a physical presence in the state.

So A Southern Season, based in Chapel Hill, charges sales tax on all orders placed in -- or shipped to -- North Carolina. Until February, purchases made through the Target store operated by Amazon.com weren't taxed despite the plethora of Target stores in the state.

Last month, Target and several national online retailers, including Wal-Mart and Toys R Us, said that, in a deal with 38 states, they would start collecting sales tax for online purchases. These stores, virtually ubiquitous nationwide, had varying policies on collecting taxes based on the location of their online divisions, not necessarily their stores. In other words, they could get around collecting sales tax in some states where they had stores.

By charging sales tax, these retailers can now let online shoppers return purchases to their local stores, a benefit already offered from the likes of Gap.com. And although some critics called the move a public-relations stunt on the part of retailers that should be collecting tax anyway, others saw it as a signal that mandatory sales tax collection might be on the way.

Asked about the deal by these large retailers to charge sales tax, the revenue department's Sabol said that confidentiality laws prohibited him from disclosing whether North Carolina was one of the states involved in the deal. But at the Target Amazon.com store, shoppers are told that their orders may be subject to local tax -- and sales tax is indeed applied for purchases going to North Carolina.

North Carolina is one of 37 states that are part of the Streamlined Sales Tax Project, an effort to simplify sales tax codes to make collecting sales tax easier on retailers in the hopes of getting more cooperation, and make moot the Supreme Court's argument that the current tax systems would place an unconstitutional burden on e-commerce merchants if they were forced to collect sales tax.

Charles Collins, a former director of sales and use tax in North Carolina and a one-time co-chairman of the Streamline project, said the effort is to modernize the system, which involves about 7,500 different tax rates nationwide and different definitions -- a scarf is clothing in some states, and not in others; some states consider orange juice a beverage, others consider it a fruit.

The Streamline project, which has proposed legislation to be passed by its participating states, also aims to certify software that will make it easier for retailers to collect tax and relieve them of any liability if an error in the software causes the wrong amount to be charged.

Streamline also hopes that simplifying tax collection for retailers will encourage Congress to require online tax collection.

"Until Congress makes a move, [collecting tax] is voluntary," Collins said. "The idea is to incentivize remote merchants to collect. ... Once they start collecting, they have the potential to do more business there. It would reduce the burden, take away the liability."

But Bill Curry, spokesman for Amazon.com, said Streamline doesn't go far enough. "There's a lot of problems they haven't attacked -- sales tax holidays, different tax rates for different ages. They're trying to create a plain-vanilla system out of Neapolitan."

Joshua Chodniewicz, president and CEO of the Raleigh online art seller Art.com, puts it another way. He says collecting the tax -- as he now does for North Carolina buyers -- is a big enough headache that if he were required to do it today for all buyers, it could put his 200-employee company out of business.

And although no one expects Congress to take up the states' case this year, other smaller online retailers still worry. Deborah Miller, marketing and communications manager at A Southern Season, echoed Chodniewicz's complaint: "If they ever pass that law, it sort of creates an administrative nightmare for a small business like ours."

And if the laws are changed, there's another worry for online merchants. Will shoppers continue to buy online once sales tax is added on top of shipping fees?

David Chatham isn't sure he would. Chatham, who works as an account director with the public-relations firm Brodeur Worldwide, will pay $33 in use taxes. He used the state's formula based on income.

"I feel like that's pretty fair," said Chatham, who bought a couple of big-ticket items of between $300 and $500 last year -- an MP3 player and a digital camera -- and several other gift, gadget and book purchases. He likely got a break of $10 or $15 by using the formula to figure what he owes.

If he had to pay taxes on every purchase, Chatham thinks he might go to the store more often.

"If it's an issue of paying the same price online versus going to the store and getting it immediately," he said, "it would make me at least take pause before I hit the 'buy' button."

The state gets $4.6 million, paid by shoppers as 'use' tax.

-- Christina Dyrness