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Senate Moves Forward With Bill To Tax Internet Sales, Final Vote Coming Soon

by Adriana Lee | April 23, 2013April 23, 2013 5:30 pm PDT

Results of a Google search on Ebay on monitor in Encinitas, California

One of the perks of shopping online is the ability to get your goods tax-free at times. But that may be coming to an end soon. The U.S. Senate has agreed to move forward with a bill that would empower states to impose sales taxes to out-of-state retailers, including e-commerce sites.

The measure — which will go on to a final Senate vote, possibly this Wednesday — could help level the playing field for brick-and-mortar businesses. Retailers with physical stores have long had to charge sales tax on purchases, so it’s no wonder that companies with such outposts, like Wal-Mart and Best Buy, have come out in favor of the bill. And predictably e-commerce companies like eBay and Overstock.com oppose it.

But not all online merchants are against the measure. Take Amazon, for instance. The company’s network of distribution centers give them a physical presence in many states, which means it is already required to charge sales tax in some places. (Nine, at last count, with seven more are on the way next year.) Amazon figures, if the bill becomes law, at least it could help standardize the transactions to some degree.

Other supporters are cash-strapped state governments, who see the bill’s revenue-generating potential, as well as President Obama, who believes this could help buoy Main Street businesses. And that may be true, even if those shops do a few e-commerce sales on the side. The bill exempts merchants with out-of-state retail sales of $1 million or less.

It’s not a lock yet — the measure has to pass both the House and the Senate — but for now, it looks like the days of big tax-free tech purchases could be numbered.

Reuters

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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