Bill to Put Sale Tax on Online Transactions

The House of Representatives is reconsidering introducing a bill that places a sales tax on goods purchase online.  The Marketplace Fairness Act will allow states to collect such taxes even if the seller is from another state.  It is estimated that a total of 4 billion dollars a year will be collected by states if this bill passes.  This piece of legislation comes after a 1992 Supreme Court ruling that states can collect taxes from mail order catalogs.  The four Congressmen that are authoring bill are citing the ruling as the basis of the law.  However, there are several outs.

The bill allows for states to decide if they wish to collect sale tax at all.  This may create an incentive for states to opt out in order to spur more business, especially across state lines.

Opponents say that this bill will hurt small online businesses.  The way the bill is worded, it could be construed that it aims to help large brick and mortal stores fight off the increasing presence of online shopping.

The bill has yet to undergo its first pass through Congress.  The most interesting aspect, to me at least, is how it will affect the online services industry.  IT management consultants that do remote services will be effected if the law passed.  How?  That’s yet to be seen.

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