New Tax On Horizon

This piece won’t make my Tea Party friends happy, but the U.S. Senate is considering legislation that would allow states to impose sales tax on online purchases. Currently, online and catalog merchants do not have to collect sales taxes if they have no physical presence in the state. The idea is to level the playing field. Online sellers have an obvious advantage over traditional “bricks and mortar” retailers if they are not required to impose sales taxes. Federal legislation may be the only way to address this. Some online retailers have indicated they would avoid states with such sales taxes. Imposing some sort of uniform system would presumably limit that type of boycott. As I’ve said before, given the financial stress that most state and local governments are experiencing, it’s hard to imagine that this isn’t going to happen before too long.