Without realizing it, you may be one of the thousands of South Carolinians who are breaking the law and cheating state schools out of millions of dollars in taxes earmarked for education. You're supposed to pay a "use tax" on items you buy over the Internet, through catalogs or television shopping networks. But most people don't pay it, and the state relies on the honor system.

The use tax is equivalent to the state sales tax. If it's five percent in your county, you pay five percent. If your county also has a local-option sales tax raising it to six or seven percent, that's what you pay.

If you pay a sales tax to another state on an Internet purchase, you don't have to pay the use tax to South Carolina, says Danny Brazell, spokesman for the state Department of Revenue.

A University of Tennessee study four years ago reported that South Carolina should be collecting about $200 million from the use tax every year. But that's not even close to what actually came in.

"Last year, more than 9,000 people reported on their state tax return and we collected about $1 million in tax revenue this way," says Brazell. "Not a large amount of money when you're talking about $200 million, but that's a million dollars more than we would have had if it wasn't on the tax return." 

All of it is earmarked for education.

So how do you pay the tax? Brazell says receipts aren't required, just keep track of your Internet purchases throughout the year. Then, on your state tax return, there's a line for the use tax. If you owe the state money, you would add the use tax to your payment. If you're getting a refund, the use tax amount would be subtracted from your refund.

USC student Alexis DuPont was sitting in a coffee shop on campus using a laptop computer with wireless Internet access to shop online. She says she spent about $500 on Internet purchases last year, and didn't know she's supposed to pay a 5 percent use tax on her return this year.

"Having just moved to South Carolina last year, I didn't even know that that existed, so it's a little bit of a shocker," she says.

Brazell says all states that have sales taxes have use taxes, too, and it's nothing new. South Carolina's has been on the books since the 1950s.

To let people know about the tax, the department sends random letters to taxpayers telling them about it and that they need to pay it if they've made any online purchases.

Others get specific letters telling them they need to pay the use tax. "We know some people are supposed to pay," Brazell says. "We know some people have made out-of-state purchases. We know this because the retailer has contacted us or through some other means. We don't want to give away too many secrets of our auditing. But through other means we found out that you made an out-of-state purchase, you didn't pay a sales tax to another state. You would owe South Carolina a tax."