|Wed July 25 2012 09:23:28|
What Do You Think of Impending Online Sales Tax?
By: Julia Wilkinson
Online buyers may soon lose the advantage of not having to pay state sales taxes when purchasing items online, just as e-sellers may lose their edge over bricks and mortar retailers in not having to collect the tax.
(Currently, in states that have sales tax, online buyers are required to pay a "use tax" for items upon which no sales tax has been paid, but sellers often don’t enforce it or buyers are not aware of the requirement).
But a new bill, the Marketplace Fairness Act, which would give states the right to collect sales taxes for online purchases, is getting bipartisan support in the Senate, and some lawmakers hope to have it passed both houses by the end of the year. Some media outlets are reporting the impending tax as if it's inevitable, but it's not a done deal yet.
The measure is gaining bipartisan support in the Senate as a way to help cash-strapped states; who figure they are losing more than $20 billion a year, according to estimates by Nashville-based advocacy group Streamlined Sales Tax, as reported in the Wall Street Journal. It remains to be seen, of course, if the bill does become law, how it will end up looking on online venues. There will likely be a separate field for this tax in the checkout process.
In the past, eBay and Amazon have been on opposite sides of this issue.
But will this new tax curtail your online buying behavior? And as an online seller, how much do you think this tax will hurt you, if at all?
In the early years of the Internet, e-tailers were struggling, and that is the context in which the last Supreme Court ruling came, in 1992, when it said online retailers were only required to charge sales tax if they had a “substantial nexus” or physical presence in the state. Now the e-tail sector is booming and is at some $200 billion a year.
What do you think of this potential tax on the horizon? Are bricks-and-mortar sellers right to cry foul that they are being used for "showrooming" and bypassed for purchases, especially of bigger ticket items? Is this issue even on your radar screen as an online seller, and/or buyer? Post a comment here!