One of the reasons why online shopping is so popular in the US is that purchases usually come free of state sales taxes. However, that happy state of affairs may soon cease - if Democratic Congressman Bill Delahunt of Massachusetts has anything to do with it. Martyn Warwick reports.
It's said that only two things in human experience are copper-bottomed certainties - death and taxes. And in the US the mills of the dreaded (even feared) IRS, (Internal Revenue Service) grind so small and remorselessly that its does indeed sometimes attempt to pursue people beyond the grave. State tax authorities are often second in line knocking on the coffin.
Currently, Americans buying over the Internet from out-of-state shopping sites don't have to pay state sales taxes, which vary enormously across the country. So, if you live in California and buy a book from a website for a vendor based in New York, you don't pay sales tax either in the east or in the west.
Some analysts identify this as a major factor in maintaining the economic health of the nation but, as always and everywhere, tax officials and state governments see revenues slipping through their fingers, and for at least the past ten years, have been trying and consistently lobbying for the introduction of a regime to tax Internet purchases.
Unsurprisingly then, as the tax monster once again rears its ugly head, Congressman Bill's Bill has the full and vocal backing of the National Conference of State Legislatures. The politician says that states could be better off to the tune of US$23 billion a year spread between them if an Internet sales tax is introduced.
The proposal also has the unequivocal support of many of the biggest US "bricks and mortar" retailers such as Wal-Mart and Costco who are required to charge and collect sales taxes at their shops across the US.
On the other side of the divide is a loose coalition of online and mail order retailers (such as Amazon and eBay) that are pressing for no sales taxes on web transactions.
For example, speaking last week,Tod Cohen, eBay's vice president for government relations said, "At a time when unemployment rates are high and small businesses across the country are closing shop, Congress should protect small Internet retailers and the consumers they serve from yet another Internet tax scheme."
As is the norm in the US, a Bill comes with some worthy or wordy title attached so Mr. Delahunt's proposed legislation is called the "Main Street Fairness Act." His Bill is seconded and a supported by several other Democrat politicians but no Republicans have signed as a co-sponsors.
The final draft of the proposed legislation will be published tomorrow and is expected to be very complex - as you'd expect from politicians trying to get to grips with the vagaries of the internet. Want another example? Well, how about Stephen Conroy in Australia? There's a government minister who doesn't have the vaguest idea about how the web works but wants to legislate to censor it all the same.
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