Consumers shop online for many reasons. Convenience. Good deals. And for some individuals, the lack of sales tax. Not all Internet companies charge sales tax on e-commerce purchases. In many states, an online retailer adds the applicable sales tax only if it has a physical presence in the state where the item was purchased. Consumers who do not pay online sales tax are required by law to report a “use tax” when they file state and federal taxes every April.
According to David French, senior vice president of government relations at the National Retail Federation, 45 states are losing an estimated $24 billion every year because of unreported Internet purchases. But a new bipartisan bill gaining traction in Congress may forever end the illusion that digital commerce represents a zero-tax environment. Republican Sen. Mike Enzi of Wyoming, a sponsor of the Marketplace Fairness Act, has brought the bill to the Senate floor as an amendment to the budget resolution. The bill would ensureRead More »from The Tax-Free Internet Shopping Era May Be Over