Implications Of Passing A Senate Bill Enacting An Online Sales Tax

The Senate Bill Enacting An Online Sales Tax

Congress is currently moving forward with a Senate bill that could place sales taxes on buyers who place orders for items housed out of state. This proposed law applies to e-commerce sites, and the main goal of this online sales tax is to generate revenue for cash-strapped state governments in jurisdictions where online retailers are headquartered. The bill has its opponents among online retail giants such as eBay, and it also has supporters among the President and a number of state government officials.

Oregon - no sales tax
Oregon – no sales tax (Photo credit: Richard Masoner / Cyclelicious)

Only online retailers that gross more than $1 million per year in sales will be subject to this online sales tax. Shoppers at large online retailers such as Amazon will see slightly higher bills for each order they place, and the tax will also apply to brick-and-mortar retailers who sell items online. A few of these vendors include Best Buy, Target, Wal-Mart and many others.

Proponents of this online sales tax Senate bill argue that it will level the commerce playing field for both physical store locations and online retailers. Some believe that online vendors have had an unfair competitive advantage of being free from such sales taxation until now. According to this viewpoint, having a set of laws that taxes both types of sellers equally is considered a fair rule of doing business in the digital age. Depending on the individual taxes rates in different geographic regions, some states could have an online sales tax of 7% per purchase while others could have one as high as 9%.

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