Senate Votes In Favor of Internet Sales Tax Bill

When it comes to shopping most consumers turn to the Internet to find what they are looking for. There are many different benefits to going on the web to shop. One of the benefits is how easy it is to find the best deals by a click of a button vs going store to store.  Some the convince are being able to be at  home not worrying about traffic, parking and long lines. I work in retail and one of the most common comments I get about online shopping is how customers are able to avoid taxes. Customers always want to get the best deals possible if they could save by shopping online they will. It is hard being a sales man and trying to match online “in cart” prices. Many times a discount has to be added on top of the sales price to get the sale of the product to accommodate taxes cutting into profit.  Congress is currently trying to get a bill passed to make online businesses required to collect sales taxes.

The current law states ” companies could not be forced to collect sales tax unless they had a physical nexus in the state: a warehouse, a production facility, or a sales representative”. One of the more well known cases is the how Amazon was targeted to collect sales taxes.  One of the benefits is that the State who in turn rely less on Income tax. Which would be beneficial to the tax payers. I personal think that congress should search somewhere else to collect revenue. I believe this would have a major effect on what shopping online is all about. Completion between Online and Store Fronts will increase. Online stores would have very completive pricing due to the fact of less overhead to worry about vs a strore front.

Buyers and seller always find a way around things but we won’t know those strategies till or if the bill is passed. How do you feel as a consumer who buys many products online about the bill? Will this cause you  to go out to shop?



13 thoughts on “Senate Votes In Favor of Internet Sales Tax Bill

  1. Although as a regular online shopper I would prefer to not have sales tax. However, as a student studying business, I think is only makes sense to charge sales tax with online shopping. The primary issue with charging tax online is the concern of double taxing an item. Since resale is very common online, congress must be careful on the wording of such bills. Otherwise, congress may loose their support from the huge online shopping crowd.

  2. As a regular online shopper, I would definitely prefer not to be taxed for shopping online. My main reason for shopping online, is to avoid the outrageous sales taxes. The passing of such a bill isn’t enough to force me to go out to shop. I want to avoid hectic traffic, and busy stores at all cost.

  3. As a consumer, I would hate to pay sales tax on products I buy online. With businesses offering free shipping and the convenience of doing your shopping in the comfort of your home, online shopping is a great way for businesses to increase revenue. Adding a sales tax would discourage consumers from doing online shopping. Businesses must lobby Congress to not set an internet sales tax for the sake of their own business. This would increase business costs and increase tax revenue for the government, which the government really needs. In the end, I think that there will be an internet sales tax just so that the government has more money.

  4. I agree with the last couple comments. I always shop online and I rather not have a sales tax on the items that I purchase through the internet. The fact that it is tax free gives the internet an advantage over stores when purchasing items. This could potentially harm the internet market. On a different note, what is different between internet sales and mail sales? Mail sales transactions cross states lines and the same thing goes for internet sales. Why regulate internet sales if you don’t regulate mail sales?

  5. I think that if it is passed to charge sales tax on things bought online, some consumers would switch their shopping habits and buy more things in store. I know many people who order everything off of Amazon just because they don’t have to pay sales tax. If this is changed, I think Amazon would lose a large group of customers. If I could order a product online without sales tax, I would choose ordering online versus going to the store. However, this would change if I was charged sales tax. If this bill is passed, I think online stores will have to give other incentives or deals to keep the customers who shop online to avoid sales tax.

  6. I am 50/50 on these new online sales tax that Illinois is trying to pass. I understand that it will be revenue for the state, but many people will stop shopping online because they will have to pay tax and shipping and handling fees, which will make it more expensive. Websites that sell products need to reconsider some of their prices because they may no longer be competitive. This will probably cause me to just go to the store and get what I need instead of shopping for it online.

  7. I as accounting intern at a national tax firm, I know that in most states Amazon already collects sales tax on purchases. That is because Amazaon has nexus in most states, because they have operating warehouses in many states. Therefore, Amazon is in favor of the sales tax law as they are already collecting sales taxes. Also, keep in mind that most sales tax revenue is at the state level not Federal level. Subsequently, we could actually see tax decreases due to the collecting of sales tax on internet purchases Namely, many states could very well lower their state income taxes due to new revenues that will be collected from internet sales tax. For example, Texas already does not charge an income tax, but instead taxes sales higher.

  8. The sales tax would not affect my online purchases. If an item that I want to purchase is not within my driving vicinity, it doesn’t matter to me if I have to pay taxes online or not. Especially, if I’m buying text books because they are so expensive. As consumers we are so used to online shopping, that I don’t think it would effect the volume by a lot. The WSJ article posted above makes a really good point. I wonder what the outcomes are gonna be regarding online sales tax. Will it lower state income tax? And if it does, won’t it just defeat the purpose of having online sales tax to increase revenue?

  9. Sales tax on internet items is a touchy subject, on the one hand you want to make it fair to the brick and mortar stores, but on the other it may strongly effect small businesses. One of the main people who use the internet is people who start small businesses and cant afford to have an actual store front, making them pay taxes on top of shipping may cause alot of those businesses to go under.

  10. I like this post. I am strongly against the passing of this bill because I own an internet startup company. A major benefit of online is we avoid certain taxes that brick and mortar stores are obligated to pay. The way the senate and government is treating our online freedoms is not good. The internet is meant to be a more lax marketplace, it has proven to be successful and I think they are going to begin passing more laws in order to “regulate” (aka take a cut). I may be bias in writing this but it definitely is not in favor of the business owner nor the shopper. They’re still are loop holes which I soon will figure out!

  11. Online shopping has become a main channel for shoppers over the last few year, and I think this tax would cause a major change in customer behavior if put into place. I think that not having a sales tax online is a major advantage to small businesses who don’t own a storefront. By adding a state tax to online purchases, I believe it will have a negative impact on business owners, and people will be less willing to shop online. Like in the comments above mentioned, websites that sell products online will need to reconsider some of their price points that are currently in place, because they may no longer have a competitive advantage if implemented.

  12. I doubt it’d curb my shopping habits from online vendors. Shopping online is just much more convenient, and even if you have to pay tax you’re still saving the gas required to go to the probably numerous stores you’d have to go to otherwise. That being said I still would be opposed to them introducing an internet sales tax bill. Too often I see ridiculously high shipping rates and feel like I’m already being screwed over.

  13. Shoppers have been buying items for years while paying sales tax. Yet, online shoppers don’t pay sales tax. Millions of dollars can be put into the economy just by having a tax on the sale of online items. Sure, we don’t like to be nickel and dimed, but if we have been doing it for a while when we buy items at a regular store, we will get used to it when we buy items online.

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