Tax-free Internet shopping jeopardized by bill:
The Senate voted 74 to 20 Monday to take up the bill. If that level of support continues, the Senate could pass the bill as early as this week.
Supporters say the bill is about fairness for businesses and lost revenue for states. Opponents say it would impose complicated regulations on retailers and doesn’t have enough protections for small businesses. Businesses with less than $1 million a year in online sales would be exempt.
The exemption is a good thing. Complying with sales taxes across 50 states is a large accounting hassle. Amazon supports the tax, undoubtedly because they’ll have an easier time complying than their smaller competitors:
Is anyone surprised that internet behemoth Amazon now supports an internet sales tax? Why would they do such a thing? The explanation is simple: the new law will be complex and difficult to comply with, which will shut down a lot of Amazon’s online competitors.
Like I’ve said before, I can’t cheer for an Internet sales tax. I don’t want to pay more taxes and I don’t want the government sticking their noses in one more area of business. On the other hand, from the point of view of local businesses it isn’t fair that they have to compete with out of state companies that don’t collect sales tax. I don’t think for one minute that fairness is motivating government to create the tax, revenue is, but it’s a valid argument for the tax.
Should an Internet sales tax become law, I’d expect some smaller ecommerce shops to move to platforms that simplify the accounting burden. For instance, Volusion, Yahoo Stores, and even Amazon.












