Amazon May Be Forced to Charge Sales Tax

Tools

By Fanna Haile-Selassie
By Randy Livingston

CARBONDALE -- The new bill means you could spend a little more when you shop at online stores like Amazon and eBay, but brick and mortar shops say it's only fair that everyone be required to pay sales tax.

The national bill is very similar to the one Illinois legislators passed at the beginning of this year that required online companies to start paying sales tax, since they had distribution centers located in the state. Amazon and Overstock responded by removing those centers to avoid the charges. But last week, U.S. Senator Dick Durbin and nine other senators introduced a national bill, one that dot-com companies couldn't side-step.

There are few greater joys than being inside a toy shop. It's a pleasure you won't have behind the flat screen of a computer.

"There really is nothing like looking at an item in person and seeing it; making sure that it is how it is represented when you see it online," said My Favorite Toys store owner Sam Cox.

And yet, Cox, says they consistently lose money to online stores like Amazon.com and eBay because consumers can typically save money by not paying sales tax.

"When someone buys their christmas toys on Amazon for $100, they pay $8.25 less than they would if they came here. Even if we were at the same price," says Cox.

"We're not going to solve this internet sales tax problem state by state. We have to do it nationally," says U.S. Senator Dick Durbin.

And that's exactly what Durbin is trying to do with the Marketplace Fairness Act, requiring all online and catalog companies that generate $500,000 or more in sales, to pay sales tax based on where the purchaser lives.

"We can't continue to penalize the shops and businesses on the streets of southern Illinois who are doing the right thing, collecting sales tax, by creating an advantage for those who sell over the internet, who aren't collecting the sales tax and are taking away their customers," Durbin explains.

Cox says he understands that for most people these days, a sale really comes down to the price tag.

"Many people do want to shop local, but when it comes down to their budget, they sometimes need to go online," says Cox. "So this will be a further encouragement to shop at local stores."

Other proposals to create a national internet sales tax have failed, but Amazon is actually endorsing this bill, which could give the legislation a needed boost. EBay has come out against this plan. It says the $500,000 sales classification of a small business is too low by many industry standards, so the bill does not help all small businesses.
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