With his state staring at a budget deficit that could hit $35 billion, California Gov. Gray Davis is rethinking his longstanding objection to imposing sales taxes on internet commerce—a move some analysts say could ignite similar steps around the nation.

States around the country face a collective $50 billion budget gap this year and $70 billion next year, so lawmakers are increasingly eyeing online revenues to plug their shortfalls.

The issue could cut two ways for schools, which increasingly rely on online purchasing for their technology equipment and other supplies.


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