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U.S. Senate passes online taxes bill

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Staff writer |
Online retailersThe U.S. Senate has passed a bill that would impose sales taxes on online retailers. The bill now goes to the House of Representatives, where some Republicans oppose it.


Currently, only companies with a physical presence in a state must charge online sales taxes and data shows that states lost nearly $12 billion last year in sales tax on online purchases. The new law would apply to retailers with more than than $1 million in online sales.

Under current law, large brick-and-mortar companies must collect sales taxes on online purchases in all states where they have stores. Their online counterparts are exempt, except in states where they have offices or distribution centres.

However, Amazon has so many distribution centres across the United States it is often subject to state sales tax and so the world's largest online retailer supports the bill wholeheartedly.

"With respect to state sales tax collection, Amazon.com has long supported a simplified nationwide approach that is even-handedly applied and applicable to all but the smallest volume sellers," Amazon's vice-president for global public policy Paul Misener wrote to senators sponsoring the bill.

As internet sales have grown "it's putting pressure on the brick-and-mortar competitors and it's putting pressure on state and local sales tax revenues. It's time for Congress to create a level playing field so that all retailers are treated fairly;" said David French, spokesman for the National Retail Federation.

Under the proposed legislation, sales taxes would be sent to the states where the purchaser lives and states would have to provide free computer software to help online firms calculate sales taxes. States should also establish a single entity to receive internet tax revenue.

Internet retailers who oppose the bill say it doesn't protect small online-only companies.

"Complying and living under the tax laws of 50 states is a major undertaking because the process of complying with tax law goes far beyond just filling out the right forms,'' said Brian Bieron, eBay's senior director of global public policy.

"Complying and living under the tax laws of 50 states is a major undertaking because the process of complying with tax law goes far beyond just filling out the right forms,'' said Brian Bieron, eBay's senior director of global public policy.

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