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States Looking To Put Internet Sales Tax On Par With Physical Stores

by Adriana Lee | July 10, 2012July 10, 2012 8:15 am PST

Internet Sales Tax

Online shopping topped $200 billion last year, and Q1 2012 saw it jump even 15 percent further. With all that cash making the rounds, you’ve got to know that the taxman is just wringing his hands, trying to figure out how to get a bigger piece of the action.

He might get his due sooner than later. States are reportedly moving toward a new sales tax policy for online purveyors, likely to at least match the regulations put on brick-and-mortar stores, says The Washington Post. If this becomes adopted on a widespread basis, one estimate pegs the possible tax revenue to be as much as $23 billion annually.

Virginia has passed an Internet sales tax law, and there’s a new bill in Congress attracting support. Obviously Facebook, eBay and others are fighting the measure. The only question is, can they do it without the powerhouse backing of Amazon on their side? Well, it looks like they’ll have to: The online retailer has started charging Texas customers sales tax, and plans are in the works to expand that to 14 states in four years’ time.

If you’re wondering why the company would do this (you’re not alone there), it’s apparently not due to any wild enthusiasm over cutting into customers’ spending dollars. It basically amounts to a supply chain issue: If Amazon is interested in offering faster delivery — and it is, extremely so — it would have to boost its chain of distribution centers. And that would basically be enough to count it as a brick-and-mortar store across multiple states, subjecting it to taxation anyway.

[via The Washington Post]


Adriana Lee

Adriana is the resident writer-slash-culture vulture who has written about everything from smartphones, tablets, apps, accessories, and small biz...

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