Online Sales Taxes?

This week, the Senate is considering a bill that would give states the ability to require large Internet retailers like Amazon to collect sales taxes on all purchases and send the revenue to the appropriate locality. The bill could raise as much as $11 billion in uncollected taxes.

http://www.washingtonpost.com/blogs/won ... -tax-bill/

Is this a good or bad idea? Of course, every governmental entity wants to get their hands on every penny of the consumer's $$ that they can.

But what about the side effects? States have to create software, states and localities have to change their tax systems, increasing their costs. Businesses have to change their accounting systems, increasing their costs. Small businesses close to the threshold would have an incentive to slow growth, or face the possibility of tax liabilities which they have not collected from consumers. With state created software, businesses will likely have up to 50 different versions of software to contend with.

It appears to me that this will likely increase the cost to consumers significantly, while increasing the net revenue insignificantly, if at all.

Thoughts?

Smaller businesses will find this too costly to implement. I understand the reasoning behind it but I think it will just continue the dominance of the huge online retailers like Amazon. The small local businesses maybe could sell their goods through someone like Amazon so the taxes would be administered through the website?

Of course if you actually read the article, you would note that small businesses are exempt from the legislation.

What do they consider a small business?

FredHayek wrote: What do they consider a small business?

Ok, in the spirit of teaching you to fish, here is how you obtain answers to your questions.
Review the original post.
Go the highlighted link in the original post.
Place your mouse over the highlighted link.
left click your mouse.
Lo and behold - a new browser window/tab will be revealed to you that has the title:
"Everything you need to know about the Senate’s online sales-tax bill"

and your answer will be made clear if you then actually read the article being discussed (always helpful to do this prior to commenting on the article).

One of the requirements is that the states provide software to make the reporting easy.

Technically you already are required to pay sales tax on internet purchases even if the internet dealer does not charge it. You are supposed to pay it with your state income tax, and I'm sure most of us do. I'm not sure how the states with no state income tax expect you to pay it though.

It's interesting that Amazon now supports charging sales tax where in the past they opposed it. Here is an article that gives a couple of possible reasons for the flip-flop...

http://www.npr.org/blogs/money/2013/04/22/178407898/why-amazon-supports-an-online-sales-tax-bill

The first reason is interesting since it states that even though companies may not like government regulations, bigger companies like Amazon can better handle them than smaller companies and in some cases regulations like a sales tax can give Amazon a competitive advantage.

Science Chic wrote: Hearthfire Books in Evergreen is urging everyone to call their representatives today and ask them to pass the bill so it levels the playing field for businesses like hers to compete against Amazon. I haven't read the bill myself to decide which is better for business as a whole, but I'm inclined to support my local small businesses first for sure.

Sales tax? I don't shop at Amazon to avoid local sales tax. I shop at Amazon for the better selection. Anything you save in sales tax is usually lost in paying shipping costs.

And in this bill, small business is defined as sales over one million dollars a year so that is a nice touch. (Per the Denver Post)