Sales tax for retail products sold on the Internet has been an issue for heated debate for some time. Since most online retail is essentially a catalog order from another state, in many cases, sales tax isn’t charged. There is a movement to get a federal law passed that would force online retailers to charge sales tax on products they ship out.
A great informative article at CNET gave some interesting insight from the matter. The crux of the argument is this. The side for sales tax claims the revenues are needed and that as it stands, it’s difficult for traditional brick and mortar businesses to compete since they do have to pay sales tax.
The other side, those against sales taxes, claim the measures are too expensive and will break their model and until states can offer some type of good system and the assistance to implement it, they shouldn’t have to do it.
I’m sure I’m going to get some grief over this but I think the sales taxes should be put in place. There’s plenty of sales tax software out there for varying sizes business. Also, many states offer a ton of programs to assist small businesses but the businesses shouldn’t receive help and incentives to integrate the programs.
Right now, a number of states are working to create a simplified and standardized sales taxing system, one that would make it easier to implement but they’re still working on it, tweaking it. They are trying to get it through Congress but have had minimal luck so far. Also, The Supreme Court weighed in prior case against the taxation issue but a Congressional law may change that ruling.
“It is way premature for the states to ask for or even deserve a federal mandate,” said NetChoice Coalition executive director Steve DelBianco in the CNET story. “No federal mandate should be given unless and until the states truly simplify, compensate sellers for cost of integration and tax processing, and provide a robust small-business exception that’s adjusted over time.”
The reality of the situation is retailers open and close every day and all the brick and mortar establishments charge sales tax. While some businesses may take a hit, they should still be subjected to the same rules as everyone else. Unfortunately, many states do need that income they lose as more and more people move online for their purchases. While a number of major companies like Wal-Mart do charge sales tax, many others don’t. Charging sales tax is the cost of doing business and honestly, if states can get it through the federal government, then they probably should.
As an online shopper, I like to occasionally have cheaper goods. I also like paved roads, better schools and other things the state provides for with a sales tax. In the end, the sales tax will come about. It should happen without incentives to businesses or even financial recompense for said industries. It’s the cost of doing business.
John Stith is a staff writer for Murdok covering technology and business.
