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Congress is Considering Bill to Impose Sales Tax on Online Purchases

Will this change your purchasing habits?

As everyone debates the great partisan divide in the federal government, there is some bipartisan legislation moving along in Congress without too much opposition from either side of the divide. If passed, the bill being considered would result in about 5 to 10 percent sales tax levied on purchases made over the Internet.

While this would level the playing field for businesses with a presence outside the virtual storefront, it would be a hardship for the U.S. consumers who, according to a recent story on CBS News, spent more than $200 billion in online sales last year. A reported 53 percent of Americans shop online, spending an average of $1,200 a piece. This is expected to rise to 58 percent by 2016 with an average expenditure of about $1,700 a piece.

Supporters, both Democrat and Republican, claim it is all about states' rights. If the bill passes, it would turn the issue over to the states. However, many believe it has a whole lot more to do with the substantial revenue that would flow into depleted state coffers that it has to do with states' rights. CBS News reports that if passed, it would raise an estimated $23 billion in additional revenue for states.

But at what cost?

According to Steve DelBianco, executive director of NetChoice representing Internet companies, the bill would weigh down thousands of small online businesses in a confusing web of new taxes.

"The big loser - small businesses," DelBianco told CBS News, "The same small businesses we're counting on to create the jobs to pull us out of the recession."

What do you think about this legislation? Do you think it's about states' rights or just another source of revenue for governments? If it passes, will it change your online purchasing habits?

Cindy Wheeler July 29, 2012 at 12:05 AM
Taxes, taxes and more taxes. When will it end?
David July 29, 2012 at 12:31 AM
It will end when we vote politicians out of office and replace them with reasonable business minded people. Tax and spend used to be a Democratic practice. Lately, even the Republicans have jumped on the bandwagon. We have created a nation of entitlement and practically everyone has their hand out.
George Wilson September 17, 2012 at 07:53 PM
By buying online a person is avoided the sales tax and to be fair to all local merchants it needs to be resolved by congress. This is an easy way to get the revenue that all states desperately need. If a uniform method of reporting with the same tax rate is put in place than I don't see a big administrative problem for any business.
Al Jung September 17, 2012 at 08:40 PM
Sales tax administration would be an incredible burden for small businesses as regulations vary by state. A small business must register with each state that it does business in (fees can be anywhere from $150-$300 per state), they must have a registered agent in each state (there are entities who will act as your registered agent in each state for $200-$300/year). You could be required to report and pay sales tax either monthly or quarterly (even if your annual sales are < $300). What types of products/services must be taxed and tax rates of city, county, stadium, and state also needs to be determined. Some states also levy an annual business tax on sales you make in their state. To accurately track sales, a small business would need to purchase special software and have a contract to get all updates to keep current with new legislation for each state. If you weren't planning on farming out your sales tax administration to a third party, you would most likely need to hire another staffer at least on a part time basis to handle the accounting and reporting side. The process of registering your business with a state usually takes about 4 weeks. This time frame would increase exponentially with the applications of hundreds of thousands of small businesses. States would have to either hire more staff, or the wait-time would be incredible. Before passing legislation, Congress needs to figure out how to make it easy and affordable for small businesses.
George Wilson September 17, 2012 at 09:42 PM
Al, I currently do business in Georgia's 159 counties and each one has a local option tax which I collect. I fill out one form each month and allocate the proper dollar amount to each county on this one form(each county has a specific number assigned to it)so it's easy to keep track. If the tax is uniform that is one rate and you have one form with the states listed I don't see this as a big deal. Indeed ,it could be done easily manually.
Athens Mama September 17, 2012 at 10:00 PM
@George - you fill out 159 forms per month - one per county? Or did I read it wrong?
Athens Mama September 17, 2012 at 10:01 PM
Never mind, I reread it a second time and realized that it is one form. Isn't the state tax different for every state though?
Chris September 17, 2012 at 10:16 PM
AM, please don't confuse George. He's too busy repeating the "Argumentum ad Hominem" BS AGAIN. AM, if you are seeking advice from George, you may want to...
Chris September 17, 2012 at 10:18 PM
Never mind. George Is exactly who YOU should look to for your expressed agenda.You guys should pick a card. Any card. Or maybe roll dice. And you people vote?
John B September 17, 2012 at 11:04 PM
and she drives a $25,000 dollar car....oh...and she's an educator...just in case she didn't make that clear in at least a dozen posts....
Chris September 17, 2012 at 11:32 PM
Yep. And buy$ Italian shoes and eats at the Country Club. For a self proclaimed "Educator", she seems to be back and forth a lot. She has no problem arguing with everyone either. Facts can be checked later.
Michael September 18, 2012 at 12:36 AM
I state of Georgia beat them to the punch.
Athens Mama September 18, 2012 at 12:44 AM
@Chris and John B - I don't have any problems agreeing with George Gibson...John B - I have a mission as a blogger, and that is to educate those who do not have the opportunity to experience certain things, but do have the opportunity to vote on the issues. "She seems to be back and forth a lot" --- you are referring to??? This is a public forum trolls, and we all have a right to voice our opinions and experiences here....
Chris September 18, 2012 at 08:21 AM
AM, you say "I don't have any problems agreeing with George Gibson". It just seems that agreeing with George Gibson makes no sense. You also say that you are here to educate people? Seriously? You insult people, you call them racist and then your posts have to be deleted. Here's a clue... when you don't have anyone agree with you ever? It might be YOU who needs educated. As for George Gibson, he rarely posts anything here that makes sense. Actually, I've never seen George Gibson post anything here at all. Who is George Gibson? Thanks for educating us. See you at the country club.
Athens Mama September 18, 2012 at 09:35 PM
Meant George Wilson. Considering the number of posts from me, I would say less than 1% would need to be deleted. I'm going to keep giving you a window into public education in certain areas. Love it, like it, hate, see you around. Maybe at the country club.
George Wilson September 18, 2012 at 10:22 PM
@AthensMam The Congress would have to enact one uniform tax rate percentage for all states for this to work.
George Wilson September 18, 2012 at 10:30 PM
@ Chris We vote ,give money and run for office.

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