Tax-free shopping on the Internet could come to an end under a bill making its way through the U-S Senate.
The bill would allow states to require online retailers to collect state and local sales taxes for purchases made over the Internet. The sales taxes would be sent to the states where a shopper lives.
Idaho Senator Mike Crapo says the bill could lead to tax relief for some residents in Idaho. “If the states are allowed to collect the revenue on sales tax on internet sales that they now are not able to collect, they would actually have some flexibility to reduce some other tax rates, either sales tax rates, or property tax rates, or some other tax rates across the state in order to provide tax relief in the state.”
Crapo calls this a state’s rights bill that allows states to develop their own policy and tells the federal government to stay out of the way.
Under current law, states can only require stores to collect sales taxes if the store has a physical presence in that state. As a result, many online sales are essentially tax-free, giving Internet retailers a big advantage over brick-and-mortar stores.
The Senate agreed Monday to take up the bill. The White House says President Barack Obama supports the measure.
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