The salad days of tax-free Net shopping may be nearing an end, if lawmakers and cash-strapped states have their way. Sen. Mike Enzi (R-Wyo.) and Rep. Bill Delahunt (D-Mass.) are expected to introduce a bill this week to close a “loophole” that has enabled shoppers to avoid paying sales taxes on Web purchases.
"This would be fiscal relief for the states that wouldn't require any money from the federal government," said Neal Osten of the National Conference of State Legislatures, which is drafting the bill. States are suffering from the lowest sales tax collections in 50 years, and face increasing pressure to fund essential services such as police and schools.
Because of complicated state and local sales tax rules, however, retailers aren't looking forward to figuring out the right amount of state sales tax to apply to a customer at the time of purchase. Groups like the Electronic Retailing Association and the Direct Marketing Association, and e-tailers like Overstock and eBay are squarely against the proposed measure.
"If we ship something out to Long Island right now, we don't know what
sales tax to charge or collect. And there may be two or three different
levels. There may be a state [tax] level, a county level and a city
level," Overstock.com president Jonathan Johnson III said.
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