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Bill Would Require Online Sites To Charge Sales Tax

For online shoppers, the party may soon be over: sales tax could be on its way to the Web, according to the New York Post, which reports that a new bill introduced to Congress this week would force retailers like eBay and Amazon.com to start collecting state sales tax from people who shop online or through mail order. The Post notes that this is not a new effort, but supporters think they may win this time because many states are broke, and badly need new revenue sources.

"This would be fiscal relief for the states that wouldn't require any money from the federal government," said Neal Osten, a senior policy analyst with the National Conference of State Legislatures, which is drafting the bill. He pointed to a study by the Rockefeller Institute that says that state sales tax collections fell to their lowest levels in 50 years at the end of 2008, dropping 6.1%. The first three months of 2009 should be even worse, he said.

Currently, online shoppers do not have to pay sales tax, but this is not because they don't owe any. Rather, retailers don't want to spend time and resources keeping track of different state, municipal and city tax rules. "It makes us the tax collectors," said Jonathan Johnson III, president of online retailer Overstock. "If we ship something out to Long Island right now, we don't know what sales tax to charge or collect. And there may be two or three different levels. There may be a state (tax) level, a county level and a city level,"

Read the whole story at New York Post »

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