Need To Know: About the Internet Sales Tax
Have a conversation with any professional e-merchant these days and you may
end up discussing (or arguing) the concept of an Internet sales tax. A tax for
those selling goods and services online has been a hot topic since the Web’s
commercial inception. So what is the answer? Do you have to charge and collect
sales tax on orders placed over the Web or what?
The answer for the e-commerce industry at this point in time is yes and no. The chances are increasingly good however that you will definitely have to in the future. But a serious problem remains in that no one can really figure out a fair, logical and comprehensive solution to the ‘Net taxation process — and that includes merchants and the government.
The Bottom Line:
Organizations such as the SSTP (The Streamlined Sales Tax Project —
streamlinedsalestax.org) are trying to simplify state and local tax collection
by establishing a system in which e-commerce companies can voluntarily pay state
taxes to the states in which their customers reside. If the SSTP ever passes
Congress, then Internet sellers of all kinds will be required to charge state
and local sales taxes at the rates in effect wherever their buyers are located.
Bills concerning an Internet sales tax are frequently proposed but often fail, in part because e-commerce companies point to a significant potential increase in compliance burdens. The United States Supreme Court has previously exempted most Internet and mail order firms from collecting state and local sales taxes, citing its adverse impact on interstate commerce.