Tax-free shopping on the Internet could be in jeopardy under a bill making its way through the Senate.

The bill would empower states to require online retailers to collect state and local sales taxes for purchases made over the Internet. The sales taxes would be sent to the states where a shopper lives.

Under current law, states can only require stores to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are essentially tax-free, giving Internet retailers a big advantage over brick-and-mortar stores. (source)

On the minus side, purchases will cost more.

On the plus side, it'll allow more business to be done at the local storefront operation, probably creating more jobs and certainly benefiting the local tax base,

What are the pros & cons as you see them?

Tags: commerce, linternet, taxation

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Some states, e.g. Colorado have a crazy quilt of tax rates because many special districts are funded by some percentage of sales tax over and above what the state, county and/or city charge.  You sometimes literally need zip-code granularity to look up a sales tax rate.  Fortunately we have computers to solve this problem that computerized shopping caused.  :P

It's the same thing here. State sales tax, county and city sales taxes as well. The differences are tiny from jurisdiction to jurisdiction, but they have legal ramifications.

Ditto.  Our sales taxes here in Georgia are so messed up from county to county.  

The voters keep voting to add 1 percent to pay for special projects.  Doesn't sound like much til you realize that we are up to 8% and will surely go to 9 eventually.  

I was shopping for a guitar recently, and almost all of the guitars were for sale be people with online stores you could visit, and they were obviously maintaining inventories. If people selling guitars are any indication of what it's come to all over eBay, then relatively few just plain ole folks are there. I suspect those people tend to use Craiglist. 

Pro- revenues for local governments and an incentive to shop IRL.

Con- less purchasing power. S&H is enough to bother with to begin with, so I usually try to find products locally.

Maybe you haven't been paying attention, but in response to Amazon many online merchants offer free shipping on just about anything with a very low threshold. On Amazon it's $25 for most items. Often, if your order comes to $23.95, for example, it's worth your while to find another item costing a couple bucks and then, voila!, free shipping.

While I understand why the online businesses will fight it tooth and nail, the moving of so much commerce to the Internet has had very damaging effects in terms of lost jobs and receding funds for local benefits such as public schools, well-maintained roads, money for policemen and firemen, etc.

Oregon: zero sales tax. So I'm indifferent.

I lived in Oregon till 2 years ago. No sales tax was nice. They DO have income tax, though, so there's no escaping taxation (legally, anyway, and unless you are General Electric). There are a total of five states without a sales tax:

I think you mean 'taxation is coming to the internet in the US'.  Here in the UK, as in all countries in the EU I believe, but don't quote me on that, we have sales tax, or Value Added Tax (VAT) on everything we buy from the internet anyway.

In the UK VAT is currently 20%, with a few exceptional tax exempt items (e.g. books, but only paper copy, we pay VAT on eBooks.)

Much as I dislike the idea of paying tax on Internet purchases, cities all over the country are having a hard time keeping their school systems going. They've been hurt by the migration of business to the tax-free Internet as well as the lost tax revenue from businesses sent down the tubes by Internet businesses with which they can't compete.

Taxes are just theft by another word.

Power corrupts. :(

That's an attitude, not a fact.

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