New Bill Would Force Online Retailers to Collect Sales Tax — Dollars and Sense
Online shoppers often cite the convenience of purchasing items from web retailers like Amazon, but another perk to cyber shopping is that buyers often don’t have to pay sales tax.
Thanks to a congressional bill, though, that could soon change.
Between “showrooming” — in which consumers check out items at physical stores before buying them for less online — and the fact that websites don’t have to charge sales tax unless they have a store, headquarters or other physical presence in the buyer’s home state, brick-and-mortar retailers have long complained that they’re at a distinct disadvantage in the marketplace.
Now there’s growing bipartisan support in Congress for legislation that would require big online retailers to collect sales taxes. And because opponents of such measures have often said sales tax collections burden online retailers that then have to comply with a patchwork of state tax laws, the bill would also streamline some 7,500 different tax jurisdictions across the country.
But Steve DelBianco, executive director of NetChoice, a lobbying group that represents online companies, said, “We don’t believe the states have simplified it nearly enough or provided protection for small sellers adequate to get Congress to overturn the physical-presence test.”
Jason Brewer, a vice president at the Retail Industry Leaders Association in Arlington, Va., which represents big box stores, disagrees. “It’s time to close the online sales tax loophole … Amazon and companies like it are no longer fledgling startups.”