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News Link • TAXES: Internet

Senate passes bill letting states tax Internet purchases, siding with traditional retailers

• The Washington Post
 The Senate sided with traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping — for many a largely tax-free frontier — to state sales taxes.

The Senate passed the bill by a vote of 69 to 27, getting support from Republicans and Democrats alike. But opposition from some conservatives who view it as a tax increase will make it a tougher sell in the House. President Barack Obama has conveyed his support for the measure.

Under current law, states can only require retailers to collect sales taxes if the store has a physical presence in the state.

That means big retailers with stores all over the country like Wal-Mart, Best Buy and Target collect sales taxes when they sell goods over the Internet. But online retailers like eBay and Amazon don’t have to collect sales taxes, except in states where they have offices or distribution centers.

As a result, many online sales are tax-free, giving Internet retailers an advantage over brick-and-mortar stores.

“We ought to have a structure in place in the states that treats all retail the same,” said Matthew Shay, president and CEO of the National Retail Federation. “Small retailers are collecting (sales tax) on the first dollar of any sale they make, and it’s only fair that other retailers who are selling to those same customers the same product have those same obligations.”

1 Comments in Response to

Comment by Temper Bay
Entered on:

 The politicians who passed this don't give a tinker's dam about helping the 'traditional merchants' or about leveling any playing feel, they did it purely as a method of getting more money for themselves to spend.

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