Representative Bill Delahunt introduced a bill today that could possibly change how many people choose to shop. The bill calls for state taxes to be paid on mail order and online purchases. This bill could affect shoppers as well as large internet based companies such as Amazon, and smaller internet based companies.
A 1992 case, Quill v. North Dakota set the precedent that gave Congress the power to decide if and to what extent the states could impose taxes on interstate mail order purchases. Supporters of the bill believe that the increased tax revenue will help states to pay for things such as roads, schools and police protection. They feel as though internet businesses should collect the same taxes as brick and mortar retailers.
Those in opposition of the bill feel that with the current state of the economy imposing yet another tax would be an undue burden on consumers and retailers.
The name of the bill is the "Main Street Fairness Act."
This is a subject where there needs to be more clarity - some states insist that people who buy products but do not remit sales tax, even on online transactions like Amazon, pay sales tax on income tax returns - North Carolina is one such state, and the NC Department of Revenue is engaging in some strong-arm tactics with Amazon to get more customer information, I believe. Not improving their reputation among taxpayers and tax practitioners.
ReplyDeleteWhile I am not a fan on remitting sales taxes on online purchases, I think that something must be done to reform sales taxes in each state - if sales cannot be taxed for online purchases, I would not be shocked if there is an expansion of items subject to sales taxes, like services such as hair cuts, legal services, etc. The current system where online purchases are exempt from sales taxes is not sustainable without some change, in my opinion. I fail to see why purchases in a book store should be subject to sales tax but not on Amazon, this no longer seems equitable to me.