Five Ways a Proposed Online Sales Tax Legislation Can Affect You

By Matthew Brennan, special to Overdrive

Businesses currently are not required to remit an Internet sales tax back to the states if they don’t have a physical presence within that state.

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That could change if a group of Republican lawmakers have their way. There’s a push on Capitol Hill to create a sales tax for online businesses, with a piece of legislation called the Marketplace Fairness Act. This legislation could have a drastic impact on the way that business is done in the United States. Pending legislation could make things more complicated for businesses.

Here are five ways the Internet could change for businesses and consumers if sales tax legislation is enacted:

The Internet Will Not Always Be The Cheaper Option – Many consumers buy online because it’s typically cheaper. If online storefronts are charging a sales tax as well, consumers may lose that cheaper option.

Small Online Retailers Could Be Forced To Comply – Major retailers are better equipped to handle potential requirements that include remitting sales taxes to the seller’s home state. It could however create a bureaucratic and costly nightmare for small businesses.

Consumer Shopping Trends Could Change – While it’s tough to forecast what would happen with a bill that hasn’t passed Congress yet, consumers could react sharply to an Internet sales tax. Small businesses currently viewed as the cheaper option may not be as viable.

It Could Place Heavy Burden On Ebay, Amazon Sellers – Those online retailers that have a model in place revolving around selling eBay or Amazon products could take a hit.

For Larger Retailers, Not Much Changes – Major big box retailers have supported the legislation for an online sales tax. They’ve maintained that it will level the playing field between smaller sellers and larger businesses.

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