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E-commerce strong in third quarter

U.S. online retail sales rose 34.3 percent in the third quarter compared with the same period a year ago, the Commerce Department reports.

U.S. online retail sales rose 34.3 percent in the third quarter compared with the same period a year ago, the Commerce Department reported.

The $11.06 billion raked in over those three months accounted for 1.3 percent of total U.S. retail sales, up from 1.1 percent a year ago.

The year-over-year gain is the largest since the first quarter of 2001. Online sales have been steadily climbing in 2002. Third-quarter sales were up 7.8 percent from the second quarter.

The Commerce Department surveys about 11,000 retail firms, but it doesn't include online travel and ticket sales or online stock trading.

Online shopping hasn't been making the stellar gains it saw in the hey-day of the dot-coms. But that hasn't stopped federal and state legislators from taking a sharp look at its growth.

More than 30 states recently approved a pact that would help create a unified sales tax for the Internet. Currently, states are prohibited from requiring out-of-state companies to collect sales tax, which effectively means that many Internet purchases are free of sales tax. The new plan is part of a proposal to get Congress to authorize a simplified sales tax method that would apply to those purchases.

On the other end, recent court rulings have fought states' attempts to bar Internet sales of items such as wine and funeral caskets. And the Federal Trade Commission recently hosted a workshop to study whether state regulations are holding up e-commerce.