Congress is building support for online sales tax
Online retailers have been affected by the inability to collect due sales tax on their web transactions for many years now. Although some retailers are larger than others and can handle this concern without much problem, small businesses can really be affected by this – to the point where many of them are not able to run web stores at all. Since the advent of the publicly available web in the early 1990s, the U.S. government has held that it would be too complicated to handle state tax laws for online transactions. Now, however, the so-called “Amazon tax” is picking up steam. The Chicago Tribune reports:
“U.S. states could collect millions of dollars in online sales taxes, with members of both parties in Congress sponsoring legislation Thursday that would resolve states’ decades-long struggle to tax businesses beyond their borders.”
States are currently missing out on a large sum of money due to them through online sales made in the confines of their borders. Although it is true that there are kinks to work out – most notably how to handle instances where orders are made in different states than the stores themselves – it is necessary to find a way to handle this issue because states are due their taxes and small businesses should be able to compete as well.
If upheld, the ruling could potentially lead to some interesting changes in the web sales market. Would big web retailers opt to move to places, like Delaware, that don’t have sales tax on certain items? How will interstate transactions be handled? We are excited to see what happens in the future of retail, and we hope that the government can come to a strong solution for this issue.