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3 On Your Side: Days Numbered For Tax-Free Online Shopping?

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jim-donovan-web Jim Donovan
Jim Donovan is a 13-time Emmy Award-winning consumer reporter w...
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by Jim Donovan

PHILADELPHIA (CBS) – Think that you’re getting a deal when you shop tax-free online?  You may not want to count on that for much longer.  As 3 On Your Side Consumer Reporter Jim Donovan tells us, states are missing out on millions of dollars in tax revenue and now Congress is taking action to change that.

Americans may soon have to say goodbye to tax-free shopping online.  Now that the U.S. Senate has passed the Marketplace Fairness Act online retailers are one step closer to collecting mandatory sales tax.  Supporters of the bill include President Obama, and big box retailers like Target and Wal-Mart, which think the bill will level the playing field.

David French of the National Retail Federation says, “It’s not an internet sales tax.  It’s the same sales tax they would pay if they walked into their local store and bought something over the counter today.  It’s just that the online competition doesn’t currently have to collect it for every state.”

eBay is leading the charge against the bill.  The online marketplace thinks smaller businesses should not have to comply.  Other opponents include conservatives and anti-tax activists.  Curtis Dubay is a tax analyst with the Heritage Foundation.  He says, “A brick and mortar business has to comply with one set of sales tax laws, these internet providers would have to comply with 9600 state and local sales taxes across the country. that’s not an equal burden.”

Under the proposed law, people in states that have sales tax would pay the same amount of sales tax as they would in a store.   The Marketplace Fairness Act still needs to pass the GOP-controlled House before it becomes law.  If you’re not sure what sales tax, you can check an interactive map at https://taxcloud.net/find-a-rate/.

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