Internet Sales Tax Gaining Momentum in Washington
If you’ve been one of the many people who have enjoyed shopping on sites such as Amazon, then you might be in for a surprise the next time you make a purchase. Instead of only having to pay sales tax if the online retailer is based out of your same state, you might have to pay sales tax anytime you make an online purchase if a bill passes through Congress.
What this bill would do if it became law is require any online business to charge sales tax based on where the buyer is living. An estimated $23 billion in sales tax was lost last year because of out-of-state purchases. This bill would also help to strengthen local businesses, as they would be on the same playing field as their out-of-state online competitors.
Despite this being in essence a tax increase, Republicans in the U.S. Senate have backed the bill, citing how it does nothing more than give states authority to enforce their own tax laws.
In the current proposed bill, online retailers who make less than $1 million in sales would be exempt from the law, so it still would allow small businesses to grow and expand without needing to charge sales tax.
States with no sales tax have put up the most opposition to the bill. Senator Jeff Merkley of Oregon said “We don’t like the idea of other states auditing our businesses.” Many others claim that this bill is all about states just looking for another way to nickel and dime consumers, while making the federal government out to be a scapegoat.
In a test vote done on Wednesday, the current bill passed in the Senate by a wide 74-23 margin. Barring more discussion, a final vote is likely to take place either today or tomorrow. The bill would then be sent to the U.S. House of Representatives, where it will have a more difficult time passing.
If you haven’t contacted your senators and representative yet, now is the time to do so if you want your voice heard. These changes will have an impact on any U.S. citizen who does a frequent amount of online shopping.