Internet Sales Tax Looming
mike lewis
- April 24 2009
- 301 views
- 10 comments
One of the many engines driving growing online sales, the lack of sales tax on purchases made in a different state than the retailer, may be about to run out of fuel.
In 1992 the Supreme Court ruled in Quill vs. North Dakota that states can’t force companies with no “physical presence” within the state to collect those states’ sales taxes. This means that companies like Zappos and Backcountry must only collect sales tax from customers in their home states of Kentucky and Utah respectively, essentially giving them a competitive advantage in all other states.
Despite the lobbying of major online retailers such as Amazon, iTunes, and Microsoft, members of both the House and Senate are expected to introduce bills in the next week that will do away with the “physical presence” statute.
According to Business Week:
If a bill passes — and that’s a big “if” — it would require all online retailers, except for the tiniest companies, to collect sales taxes in the 23 states that are part of the Streamlined Sales Tax Project. The states would compensate the retailers for the trouble, while promising not to sue them for tax collection mistakes that are made.
We’d like to know what you think about this. Should online retailers be required to collect sales tax in all states? What would this proposed new law mean for your business?
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April 25th, 2009 at 10:53 pm
Well, I don't like it. Businesses get taxed enough already…EVERYONE gets taxed enough already. It's your money that YOU earn. This is just another way for greedy politicians to try to get a bigger piece of the pie that you earned. I understand the need for taxes but when will enough be enough? Does it not piss anyone else off that the government chooses how much of your money is actually yours? The tax rates are outrages enough as it is. This tax would only hurt online businesses. Cut government spending and LOWER our taxes. Alright, I'm done ranting. Just my 2 cents.
April 26th, 2009 at 6:56 am
our business has been clipped by so many kids coming in and flexing boards, trying gear on, only to pick shit up off the web. we've got a web presence but not big enough to offset this. fair is fair. bring it!
April 27th, 2009 at 5:18 pm
fair enough, but if you're going to tax one type of sale and not another then the playing field isn't level