Tax-free Internet shopping may be at an end

CNET News ^ | April 15, 2009 | Declan McCullagh

[Comparative Advantage]

If a little-known but influential alliance of state politicians, large retailers, and tax collectors have their way, the days of tax-free Internet shopping may be nearly over.

A bill expected to be introduced in the U.S. Congress as early as Monday would rewrite the ground rules for mail order and Internet sales by eliminating what its supporters view as a "loophole" that, in many cases, allows Americans to shop over the Internet without paying sales taxes.

Currently, Americans who shop over the Internet from out-of-state vendors aren't always required to pay sales taxes at the time of purchase. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't pay sales taxes at checkout time that they would if shopping at a local mall.

"We will have the bill ready for introduction by next Monday," said Neal Osten of the National Conference of State Legislatures. "We finalized the language and now we're working out the remaining issues and adding some new provisions at the request of various stakeholders."

This is hardly a new debate: pro-tax officials and state governments have been pressing Congress to enact such a law for at least seven years. They argue that reduced sales tax revenue threatens budgets for schools and police, and say that, as a matter of fairness, online retailers should be forced to collect the same taxes that brick-and-mortar retailers do.

[LostInBayport]

Big surprise, not! Any way they can think of to tax us they will. Exhaling will probably be the next thing, global warming you know.

As I read this story, I was hearing the Beatles singing about the Taxman...

They intended sarcasm (I think) but it's coming true...

[PhiKapMom]

I paid for Prime Shipping two years ago expecting to have to renew it every year but was only charged the first year. It is 2-day shipping for free on most items.

[Vigilanteman]

Even the tax grabbers here in Pennsylvania have figured out one of the few reasons shoppers flock to this state is to buy clothing because it is sales tax exempt. A number of great clothing outlets and even clothing manufacturers who locate in this state because of the favorable tax treatment. The state makes a lot more taxing the profits and payrolls than they would taxing the clothing.

But the same tax grabbing nimrods can't make the same connnection with other industries which they are taxing out of business or encouraging them to leave the state.

[Dr. Scarpetta]

Just wondering if you ever buy the used books at Amazon. I’ve been thinking about trying it.

[elpinta]

I can see merchants starting to sell for cash and forgetting to report it... and us buying ‘less-tax’...
I lived in such a place, and it works real well.
It was a socialized cesspool, still is, but the ‘leaders’ still manage to milk the people somehow.
FUtaxman!

[Redbob]

"This will require a fee to be added on to brick and motar store sales so everything is fair."

You don't think the brick/mortar store owners will figure this out?

Prices will go up for everyone, when the "brickies" figure out they can charge more and still be competitive with mail order.

Meanwhile, outfits like Amazon brought this on themselves by blatantly flaunting the law: they have regional warehouses throughout the country from which they ship, but pretend they don't need to collect taxes for sales in the states where they're located.

[max americana]

In a way, the more you read at BN, the more you hurt the sales at the store because u don’t buy anything. BN are run by avid libs anyway, and you are just practicing what THEY preach. Capitalism is baaaaad..

[kempo]

I can see thousands offs layoffs at UPS and FedEx in the making. Economy goes down further. These people are not smart.

[Redbob]

"I can see merchants starting to sell for cash and forgetting to report it..."

Where ya been, el?

Merchants have been doing this as long as there have been taxes.

[theymakemesick]

This can’t be true, 0bama said taxes won’t go up.

[AZLiberty]

Not to worry. Obama pledged that he would not raise taxes on anyone making < 250k.

Send a copy of your 1040 to Amazon, and demand an exemption.

[elpinta]

Yes, a lot of merchants have, but is not wide-spread, not to the larger stores.
THIS little event we are discussing could make it REALLY popular.
I did retail for a while, I know how it works... ;-)

[Dr. Scarpetta]

You’re right about people coming to shop here in PA for clothes because there’s no tax.

Whenever I go shopping at the Crossings Outlets near Stroudsburg, PA, I always see busses from NY. The parking lot is usually full of cars with NY plates too.

http://www.premiumoutlets.com/outlets/outlet.asp?id=59

[angkor]

>>>> My solution is to turn the tables—buy as little as possible, and when possible buy locally for cash or barter. <<<<

If/when they add state sales taxes to online purchases, I’ll stop buying online.

Simple.

[AZLiberty]

I buy used books all the time through, not from Amazon. The sellers of used books are independent booksellers who sell through Amazon. I've bought books for as little as one cent -- plus $3.99 shipping -- and have almost never been disappointed. Once I got the wrong book but the seller -- figuring he sent my book as the wrong book to someone else -- just refunded the purchase price plus shipping.

Used books are not covered by the $25 rule or by Amazon Prime. You always pay shipping, but it's pretty reasonable.

[GlennBeck08]

When will it end?

[giotto]

There’s no way you could get me into a Barnes and Noble. Every time I’ve been to one of our local B&Ns, the attitude of the clerks was incredibly obnoxious. Of course, it didn’t help that I was asking about books by Ann Coulter, Mark Levin, etc.

[UCANSEE2]

They argue that reduced sales tax revenue threatens budgets for schools and police Caribbean cruises and Limos.

[Blood of Tyrants]

That is the Rat way. Spend more money than ever and raise taxes.

[Moonman62]

Meanwhile, outfits like Amazon brought this on themselves by blatantly flaunting the law:

The last I heard, Amazon actually supports an internet sales tax.