Privacy, Inc. reports that Senator Durbin (D-Il) is proposing to end the golden era of tax-free Internet shopping. His proposal would eliminating the ability to shop at internet merchants like Amazon and Overstock without paying state sales taxes. Durbin will introduce the bill after the Easter recess. "Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?" Durbin said in a speech in February. "Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab."
There are reportedly some 7,500 different taxing jurisdictions in the United States, each with a set of very precise rules describing what can and can't be taxed and at what rate. That would seemingly make it challenging for merchants to collect sales tax for each.
In March, the Vermont House of Representatives passed a proposal to impose collection of the state's 6% sales tax on internet merchants selling to Vermont residents. Proponents say the measure would bring up to $25 million in new revenues to the state. On the flip side, the measure has drawn fire from critics who say it will hurt Vermont businesses that sell their wares through sites like Amazon.com. If passed by the Vermont Senate and signed by Governor Shumlin, the legislation would be applicable to internet merchants that have more than $10,000 in annual sales, who have in-state businesses affiliated with them. It would become effective on July 1, 2012.
Read Privacy's article about Durbin's internet sales tax effort here.
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