Also let me add........one should never "net" income from expenses and not report. Always report ALL income and deduct ALL expenses even if you do it on a plain piece of paper included with your tax return.

Sales tax is another matter. ALL States are hurting BIG TIME. The States need money. They want to get their hands on the sales tax that is generated from internet sales. California for one is hitting the internet seller hard.

Remember most States have a "use" tax which just so happens to be equal in amount to sales tax.
SOOOOOOOOOOOOOO what happens is there is no sales tax across State lines but there is a USE Tax generally placed upon the BUYER who must forward it to the State. Sales tax is also placed upon the buyer but it is collected by the seller who does the forwarding for his/her buyers.

Best, Jim