state sales tax

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Your online purchases could alleviate some of Kentucky's budget woes.

The federal legislation that allows states to collect sales taxes from more online retailers would benefit the Kentucky state budget, argues a policy group focused on economic policy.

If such legislation passed, Kentucky could gain $130 million to $200 million in revenue per year, the state's Blue Ribbon Tax Commission has estimated. That sort of money could lead to a restoration to programs that have recently been cut, including the child care subsidy for low-incoming, working families, says Jason Bailey, director of the Kentucky Center for Economic Policy.

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A tax expert is warning state officials that Tennessee would be among the hardest-hit states if federal officials don't resolve the so-called fiscal cliff. Dr. Stan Chervin says states like Tennessee that depend heavily on sales taxes for revenue would feel the most stress if tax breaks are not extended. The Chattanooga Times Free Press reports Chervin is a senior research consultant with the state Advisory Commission on Intergovernmental Relation.