 |
Goodlatte Introduces Revamped Internet Sales Tax Proposal
Source:
forbes.com
- Sep 8, 2016
The Census Bureau of the Department of Commerce estimates that U.S. retail e-commerce sales for the second quarter of 2016, adjusted for seasonal variation, hit a whopping $97.3 billion (report downloads as a pdf). Since many online retailers aren’t collecting sales tax – either because they’re not required to or they choose not to – states are losing millions of dollars in sales tax revenue each year. That may be changing soon – if Congress can agree on a plan.
Under current law, companies which make sales online are still subject to the same sales tax collection requirements as so-called “brick and mortar” stores. The test is whether the company has a physical presence in that state (though physical presence is a bit subjective, depending on who is asking). If a company has a physical presence in a state, they are required to collect and remit sales taxes.
Even if a company doesn’t charge sales tax, that doesn’t necessarily mean that consumers get a pass. Many states impose a “use tax” which is the consumer’s version of the sales tax. If a state has a use tax and a consumer is not charged a sales tax, taxpayers are supposed to self-report and pay the tax. Almost half of the states offer a line on their income tax returns now for this purpose; otherwise, there are separate tax forms for completion. As you can imagine, between the complexity and the insanity of this rule, most consumers ignore it.
CLICK ON SOURCE TO READ ENTIRE ARTICLE
Category: General Business
|
