US Senate May Move to Enact Internet Sales Tax

Ryan Whitwam

According to Cnet, one US Senator is preparing to introduce legislation that would radically alter online commerce. The bill would end the ability of Americans to buy goods from online retailers free from state sales tax. Democrat Dick Durbin of Illinois is expected to present the bill shortly after the Easter recess.

Under current law, if an online retailer does not have a physical presence in a state, buyers do not have to pay the sales tax at the time of purchase. Durbin contends this is an unfair advantage. "Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?" Durbin said in February.

The prospect of an internet sales tax is likely to rattle online retailers. It's not just the price competition, but the laws from one place to the next vary widely. There are about 7,500 different taxing jurisdictions in the US, many with their own regulations. Big sites like Amazon, and smaller independent sites would need to keep track of these rules. Do you think Internet sales tax is an inevitability?

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