Tuesday, July 17, 2012
Here comes the online sales tax...
Some Republican governors, eager to enrich their thinning state coffers, are endorsing a tax that would be imposed on products sold online. According to the National Conference of State Legislatures strapped, states could reap as much as $23 billion in new annual revenue, Breitbart reports.
Cato Institute favorite, New Jersey Gov. Chris Christie recently struck a deal that will cause Amazon to collect sales taxes on NJ state's online purchases. He called taxation of online sales "an important issue to all the nation's governors" and endorsed federal legislation that would allow states to tax online purchases.
According to Breitbart, Amazon.com, which initially viewed with disfavor the idea of a sales tax, has decided that they now like the idea. Why? Because Amazon plans to offer same-day delivery, which will mean it needs more local warehouses, and it will then get hit by state taxes anyway.
Amazon agreed to start collecting taxes in NJ in July 2013. Amazon also supports federal legislation mandating state sales tax collection on online purchases, since this would take away its competitors’ pricing advantage as it expands its warehouse concept.
Online taxes will really hurt small internet businesses.
Steve DelBianco, executive director of NetChoice, a trade group representing eBay, Overstock.com and others, said, "Besides the Republican support, this position change is being driven by the millions of dollars being spent by the big-box retailers—and now Amazon—to push the sales tax through Congress."
States that already have an online sales tax are Kansas, Kentucky, North Dakota, New York, Texas and Washington. Other state that are planning to join them are California (Sept. 2012), Indiana (Jan. 2014), Nevada (Jan. 2014), New Jersey (July 2013), South Carolina (Jan. 2016),Tennessee (Jan 2014) and Virginia (Sept 2013).