Recently I have seen an increase in articles in the net talking about imposing a sales tax on the Internet sales. In most cases the articles and editorials are strongly against the proposals, for example a recent article on AuctionBytres entitled: eBay Rallies Sellers against Sales Tax Legislation where it was reported that eBay has sent out an email encouraging its members to sign a petition against the new Main Street Fairness Act that was introduced in the U.S. House of Representatives this month.
The bill (H.R. 5660) was introduced by Rep. Bill Delahunt of Massachusetts (see the statement from his website here and a PDF summary of the bill can be located at: http://delahunt.house.gov/mainstreetsummary.pdf)
>Delahunt stated the bill was designed to help states "retrieve billions in sales tax revenues that are owed but currently going uncollected while providing long overdue relief to Main Street businesses by restoring fairness and competition to the marketplace."
The AucitonBytes article reports that " According to eBay, HR 5660 would be extremely burdensome and costly to small online retailers, and said it was working very hard to stop the bill from becoming law."
I agree with many who have stated that Internet sales tax will have an impact on Internet sales. For example, I can see buyers who have purchased on the Net to avoid paying sales tax via a trade off of having to wait for an item to arrive at their location may return to shopping in a local store or purchasing from a seller online who is out of state. In the latter scenario I feel the sales tax would work itself out for minimum impact on sellers overall.
However, I have said this for years that Internet sales Tax is inevitable and has become necessary.
Reason: everyone wants a strong police department, a good fire department, jails, schools with the best teachers for their kids, road work don in their town, etc, but when we purchase online to avoid paying sales tax our local communities are hurt.
It was reported in the Kansas City Star that Missouri's revenue falls 9.1 percent in 2010 budget year The article reported that sales taxes were down nearly 5$ from the last physical year which promoted the state and many local governments area and statewide to make budget cuts.
To maintain a level of local services we all are accustomed to, the money needs to come from somewhere. If you raise the sales tax overall and not impose a sales tax on the Internet, you will drive more customers to shop online which could make the problem worse, but a fair Internet sales Tax that would help the community and state, and at the same time would not be so burdensome that a small business would go out of business is needed.
To learn more about eBay's main street, a way eBay helps lobby for the interest of it's sellers, visit http://www.ebaymainstreet.com/