FYI

Senate Approves Online Sales Tax

Online Sales Tax2

Monday, the Senate voted to allow states to collect sales tax on online sales. Now it goes to the House.

As you know, if you shop online, you don’t have to pay sales tax. There is a law requiring businesses to collect sales tax, but only on items that are shipped to states where they have a physical presence, like a distribution center or a brick-and-mortar store.

Did you know you’re actually required to pay sales tax on stuff you buy online right now? This applies to any state, including Texas. It’s called the ‘use tax.’ At the end of the year, when you’re doing your taxes, you’re actually supposed to pay what would be the actual sales tax on those items you bought.

Most people either ignore that law or don’t know about it. States say it’s just too difficult to enforce. It’s too much effort to actually make those retailers pay in to each state’s sales tax.

So, the argument here for the people who are for this bill is that you’re not actually raising taxes, you’re just requiring people to pay a tax that they’re already supposed to be paying.

What this will do is force every company that sells goods online to collect sales tax, based on where that item is being shipped.

Think about the money. Last year, Internet sales in the US totaled $226 billion. States lost out on nearly $23 billion in revenue.

The bill still has to go to the House, but President Barack Obama has said that he supports it.

So, what does this mean for you? Well, you’ll have to pay sales tax, just like you would at any regular store. It could go into effect as early as October 1, 2013.

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