Monday, July 09, 2012

Congress mulls normalizing sales taxes on all Internet commerce

According to a story today in the Washington Post and Chicago Tribune, Congress is considering a bill making sales taxes for Internet purchases standard regardless of where the goods or services originate. I guess this would come under Congress's powers under the Commerce clause. 

Many states are passing laws requiring online suppliers to charge sales taxes and for residents, but generally these are constitutional only when the supplier has a physical presence in a particular state.

In some states with income taxes, taxpayers are supposed to declare online purchases, but almost none do.  I have not encountered this in Virginia when preparing my own taxes online with HRBlock.

When I self-published my first “Do Ask Do Tell” book, I set up a formal proprietorship called “High Productivity Publishing” on Jan. 2, 1997, and did pay a visit to the sales tax office in Fairfax, VA.  But then I moved to Minneapolis in September and did not have to do the same thing in Minnesota. (The book was officially published on July 11, 1997, fifteen years ago).

Small businesses don't have the staff to implement complicated sales tax systems, but many (because the complexity of meeting privacy requirements) outsource all of their e-commerce to large service companies anyway.

See also an earlier story Nov. 10, 2011. 

The link for the news story is here

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