Online shopping has become a part of everyday life for many Americans. If you ask someone where he or she got their new tech gadget or a new pair of shoes, “online” is a more common response now more than ever. Yet some consumers do not realize that they could be spending more or less on their purchases based on where they are being delivered. As with other things involving the Internet, online sales tax is still a grey area. Although legislation is currently up for consideration, there is no current federal law requiring online sales taxes in the nation. However, some states have taken their own initiative and created local statutes due to the extra revenue that online sales taxes bring in. Some online retailers oppose these taxes, as they
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“A Season for Sales Taxes” states that since 2008 New York has had a law that requires large online retailers that use New York-based affiliates to collect sales taxes. An article on Bloomberg.com mentions, “New York’s measure is among a handful that have been dubbed ‘Amazon laws’ because they affect only the largest online sellers” (Stohr). Larger online stores tend to be the ones that pay locally based affiliates commissions for hosting links back to them. This act is what creates an “in-state sales force” and makes them subject to local sales tax laws. As expected, online retailers strongly opposed these laws. Amazon and Overstock appealed to the U.S. Supreme Court and argued that New York’s laws were violating the Constitution’s commerce clause. The Supreme Court in turn refused to take up these appeals, leaving the issue up in the air on the federal level and online retailers stuck charging sales …show more content…
The revenue it would bring in is incredible. The states not currently collecting taxes from online sales are missing out on not only revenue from taxing sales of tangible merchandise, but also millions of dollars worth of taxes from sales of digital media downloads and online travel agency bookings according to “A Season of Sales Taxes”. Twenty-three states are not currently taxing downloads of books, games, movies, and music and are missing out on a total of $300 million a year. Forty-two states are missing out on $350 million because they are allowing online travel agencies to tax the wholesale price of hotel rooms rather than retail price. If a national law were passed, it would mean a proper and uniform way to collect sales taxes on all things purchased online, be it a watch, a digital album, or a hotel room. The money generated from online sales taxes can fund a variety of projects that have suffered since the recession. Some states already have plans to use the revenue for infrastructure
“A Season for Sales Taxes” states that since 2008 New York has had a law that requires large online retailers that use New York-based affiliates to collect sales taxes. An article on Bloomberg.com mentions, “New York’s measure is among a handful that have been dubbed ‘Amazon laws’ because they affect only the largest online sellers” (Stohr). Larger online stores tend to be the ones that pay locally based affiliates commissions for hosting links back to them. This act is what creates an “in-state sales force” and makes them subject to local sales tax laws. As expected, online retailers strongly opposed these laws. Amazon and Overstock appealed to the U.S. Supreme Court and argued that New York’s laws were violating the Constitution’s commerce clause. The Supreme Court in turn refused to take up these appeals, leaving the issue up in the air on the federal level and online retailers stuck charging sales …show more content…
The revenue it would bring in is incredible. The states not currently collecting taxes from online sales are missing out on not only revenue from taxing sales of tangible merchandise, but also millions of dollars worth of taxes from sales of digital media downloads and online travel agency bookings according to “A Season of Sales Taxes”. Twenty-three states are not currently taxing downloads of books, games, movies, and music and are missing out on a total of $300 million a year. Forty-two states are missing out on $350 million because they are allowing online travel agencies to tax the wholesale price of hotel rooms rather than retail price. If a national law were passed, it would mean a proper and uniform way to collect sales taxes on all things purchased online, be it a watch, a digital album, or a hotel room. The money generated from online sales taxes can fund a variety of projects that have suffered since the recession. Some states already have plans to use the revenue for infrastructure