Tax-Free Online Shopping Hits the Chopping Block
Senate votes 74 to 20 to take up bill that could spell the end
By Matt Cantor, Newser User
Posted Apr 23, 2013 7:49 AM CDT
The Senate is considering a new measure that would allow states to require online retailers to collect sales tax.   (Shutterstock)

(Newser) – The halcyon days of widespread tax-free online shopping may be numbered. The Senate yesterday voted 74 to 20 to take up a bill that would let states require Internet retailers to collect sales tax, the AP reports. It could be passed within the week, though it may have a tougher time among House Republicans who call it a tax hike. As it stands, states can't require online retailers to collect state and local taxes unless the business is physically based in the state. Some states call on taxpayers to pay online sales tax with their yearly returns, but few actually do it, officials say.

Advocates argue that the bill, which has President Obama's support and doesn't apply to businesses with less than $1 million in yearly online sales, levels the playing field and means more state revenue. But "it is going to make online businesses the tax collectors for the nation," says New Hampshire Sen. Kelly Ayotte. A Wall Street Journal editorial rails against the idea, saying it "discriminates against Internet-based businesses." While online firms in New Hampshire would have to collect state and local taxes, for instance, the state's brick-and-mortar firms still wouldn't. Click for the full piece.

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Showing 3 of 16 comments
Apr 24, 2013 11:55 AM CDT
Yeah, but I didn't make the purchase of an item in the state I live in - I made the purchase of an item where the company is located. What happens if the company I am purchasing from is not in the US?
Apr 23, 2013 3:37 PM CDT
Back in the Jimmy Carter fuel "crisis" wimpout -- when Mr. Peanut decreed 55 mph and told states if they didn't support the limit he would lift highway finding, my home state of Wyoming responded by saying: "OK, but be sure to send your federalies out here to collect gas taxes at all the pumps, 'cause we ain't gonna do it for you". Compromise was reached: 1. Actual tickets for speeding above 75 (with out of state plates). 2. No tickets for "breaking" 55, just a mild reproach for "wasting valuable national resources". There ARE ways to tell the feds to go to hell. It's is just that most states are too wimpy to do so.
Apr 23, 2013 3:19 PM CDT
This is just dumb. A company in state A being forced to collect taxes for state B makes no sense. If state B wants the tax revenue, let THEM do the taxing