Attention online shoppers: Prepare to get taxed.Lawmakers are pushing hard for a new internet sales tax they hope would give local governments a financial boost and level the playing field between brick-and-mortar retailers and their online competition.
As it stands, the U.S. Supreme Court has barred states from slapping out-of-state companies with in-state taxes on sales. That means e-tailers like Amazon and eBay can get away without taxing their shoppers based on where they live while states lose out on major tax revenue.
The L.A. Times’ Jim Puzzanghera reports:
“Amazon.com Inc., the world’s largest online retailer, wants standardized federal rules in the face of new online sales tax collection laws in California and a growing number of other states.
The bill, called the Marketplace Fairness Act, also would enable state and local governments to collect an estimated $23 billion in tax revenue each year for online, catalogue and other so-called remote sales.
The severe economic problems of many state and local governments add to the impetus to pass the legislation, which would boost revenue without creating a new tax, said Neal Osten, director of the Washington office of the National Conference of State Legislatures.”
With Amazon backing the bill and a bipartisan push, it’s probably only a matter of time before some reform passes Congress.
Amazon already agreed to start paying taxes on purchases made by Californians through its online store in September 2010.
If implemented, the law would give states the ability to opt into a sales tax program for online retailers, potentially bringing in more than $23 billion in much-needed tax revenue for states.
States lost more than $7 billion to uncollected sales taxes on e-commerce sales, according to a 2009 University of Tennessee study.
If you’re wondering how much your state might charge for online sales, check out Bankrate’s state-by-state sales tax map here.
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