|Mon June 20 2011 21:45:51|
Online Sales Tax Is Coming - How Will It Affect You?
By: Ina Steiner
Right now, many merchants collect sales tax in the state(s) in which they reside and operate their business, including where they warehouse their goods (Amazon FBA and other fulfillment houses included).
But what would you do if you had to collect sales tax for every jurisdiction in the country on your eBay, Amazon.com, Etsy and storefront sales, and had to keep records and file periodic reports with all of those tax agencies?
The Associated Press published an article over the weekend about the online sales-tax battle which has been heating up for the last 2 years. Large retail chains are lobbying Congress through its Alliance for Main Street Fairness organization, which says on its website, "We are working to close the anti-small business online sales tax loophole."
Currently merchants must collect sales tax only in states in which they have a presence thanks to a 1992 Supreme Court ruling - but large retail chains with stores in many or all states say this isn't fair to them and point to Amazon.com and Overstock, which don't have to collect sales tax in the states in which they have no warehouse or office space.
Amazon says it would support legislation at the federal level that would streamline and simplify tax collection. It's also working with states like South Carolina and Texas to get exemptions from collecting sales tax in exchange for creating a minimum number of jobs in the state. (See "Amazon negotiating for sales-tax exemption in trade for 5,000 new Texas jobs," - link to article.)
It seems inevitable that more states will join the online sales tax bandwagon, and there's a good chance federal legislation may come sooner or later. We'd like to know if and how online sales taxes affect your behavior, as a buyer and as a seller.
Would you reduce your buying activity on marketplaces like eBay and Amazon.com if you had to pay sales tax on your purchases? Would you instead buy more from brick-and-mortar retailers in your area?
As a seller, how would having to collect sales tax affect your business?
We'll tally your responses in this quick online survey, and feel free to leave your comments below on any aspects of the online sales tax debate.