UPDATE: Senate Approves New Internet Sales Tax Laws That Might Cost You More Money
As the old adage goes: the only things that are certain are death and taxes. With the government trying to find more ways to generate income, taxes are becoming more absolute. Some online stores that have avoided sales tax may have to charge them soon, depending on the outcome of the the Senate vote on the “Marketplace Fairness Act.” It would require retailers in 45 states and the District of Columbia to charge their residents sales tax for online purchases.
As of now brick-and-mortar stores with an online presence like Target or Macys, already charge sales tax for online purchases. But in many states, customers that shop at online-only sites, like Amazon.com, can shop tax-free. These online sellers are only required to collect taxes in states where they have a physical presence, like a store or warehouse. The new law would require online seller to collect sales tax even in states where they don’t have operations, if they have sales of at least $1 million.
This may sound like a tax increase, but many online sales are already supposed to include a tax at checkout. Many small businesses that have online stores will continue with business as usual as long as they are not over the $ 1 million in sales mark. It will be interesting to see if customers will seek out smaller retailers to avoid the tax. Though if we had to take a guess, most shoppers are so used to paying sales tax that this will really be a non-factor.
For more information on the Market Place Fairness Act and how this law might impact you, visit marketplacefairness.org.
UPDATE: With a vote of 69-27 the Senate has backed the Marketplace Fairness Act. The bill will now be reviewed by the House of Representatives, where it may face opposition by anti-tax Republicans. However, President Obama has already voiced his support and is willing to sign the bill into law if the House passes it.