Congress May End Tax-Free Internet Shopping
(CBS) — Tax-free shopping on the internet may soon be history.
The U.S. Senate passed a bill giving states the power to collect taxes. As CBS 2’s Dorothy Tucker reports, consumers aren’t the only ones who are unhappy.
Derrick Elkins does about 25 percent of his shopping online.
“I buy almost all gifts online, all electronics online,” he says.
But if he has to pay sales tax, that might change.
“If all things are equal I’m going to buy it in my neighborhood because I can take it home that day and I can support a store,” Elkins says.
The addition of sales tax means shoppers like Elkins would have to add almost 10 percent to every online purchase. If the bill passes, experts say brick-and-mortar retailers would be the biggest winners.
“All that we’re asking is to have a level playing field so that small brick-and-mortar sellers can compete with small internet sellers,” says Rachelle Bernstein of the National Retail Federation.
E-commerce retailers are the biggest losers potentially.
Brad Wilson operates a website that features the best deals more than 3,000 retailers. He sees headaches for the eBay sellers, small online sites or ma and pa retailers like Two-Sided Gifts, which also sells online and must now collect sales tax from everyone.
Even though the proposed bill recommends each state provide retailers with tax software, Wilson says it still won’t be easy.
“E-retail businesses will literally have to dig in by zip code, consumer by consumer,” he says. “It is a mess of profound proportions.”
Ebay is asking its users to complain and write members of the House and demand that they vote “no” on the online sales tax bill.