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It has been a long debated issue, almost since internet is available to the
public. The internet sales tax law is advancing through Congress and it would
require that all online retailers in 45 states and the District Of Columbia
collect the sales tax on all purchases.
Under current law, when you place an online order you are charged a sales tax only if you live in the state where the retailer has a physical presence, either a store, warehouse or factory. Those living in other states are not charged the sales tax by the retailer, so buy tax free at the time of purchase but are supposed to voluntarily pay it in their home state! It is estimated that only 1% do it…
Under the proposed legislation, retailers with more than $1 million a year in sales would be responsible for collecting the tax from buyers in the 45 states plus D.C. that currently charge sales tax. Even if an online retailer provides “tax-free” purchases as a way of attracting customers, the way many now offer free shipping, it would be responsible for paying the sales taxes to the various states. That would likely raise the cost of the item you buy online.
The National Retail Federation is one of the most active voices in support of the proposal, as it is concerned its brick-and-mortar members are losing sales to online competitors. The legislation could be in its final form this week, though a vote might not come until after the coming recess. The new proposed legislation does have bipartisan support.
Under current law, when you place an online order you are charged a sales tax only if you live in the state where the retailer has a physical presence, either a store, warehouse or factory. Those living in other states are not charged the sales tax by the retailer, so buy tax free at the time of purchase but are supposed to voluntarily pay it in their home state! It is estimated that only 1% do it…
Under the proposed legislation, retailers with more than $1 million a year in sales would be responsible for collecting the tax from buyers in the 45 states plus D.C. that currently charge sales tax. Even if an online retailer provides “tax-free” purchases as a way of attracting customers, the way many now offer free shipping, it would be responsible for paying the sales taxes to the various states. That would likely raise the cost of the item you buy online.
The National Retail Federation is one of the most active voices in support of the proposal, as it is concerned its brick-and-mortar members are losing sales to online competitors. The legislation could be in its final form this week, though a vote might not come until after the coming recess. The new proposed legislation does have bipartisan support.
