Consumer Watch: Tax-free shopping online could be a thing of the past

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by Andy Treinen

WHAS11.com

Posted on May 7, 2013 at 4:36 PM

(WHAS11) -- You may think you're getting a deal when you shop tax-free online, but states are missing out an estimated tens of millions of dollars in tax revenue. Now, Congress is taking action to change that.  Good Morning Kentuckiana’s Andy Treinen has more in Consumer Watch.

Americans may soon have to say goodbye to tax-free shopping online, now that the U.S. Senate has passed the Marketplace Fairness Act. Online retailers are one step closer to collecting mandatory sales tax. Supporters of the bill include President Obama, and big box retailers like Target and Wal-Mart, which think the bill will level the playing field.

“It's not an Internet sales tax. It's the same sales tax they would pay if they walked into their local store and bought something over the counter today. It's just that the online competition doesn't currently have to collect it for every state,” David French of the National Retail Federation said.

Ebay is leading the charge against the bill. The online marketplace thinks smaller businesses should not have to comply. Other opponents include conservatives and anti-tax activists. “A brick and mortar business has to comply with one set of sales tax laws, these internet providers would have to comply with 9600 state and local sales taxes across the country. That's not an equal burden,” according to Heritage Foundation Tax Analyst Curtis Dubay.

Under the proposed law, people in states that have sales tax would pay the same amount of sales tax as they would in a store.
 
Check out the interactive map on taxcloud.net to get an idea of what you'll pay in your state.

The Marketplace Fairness Act still needs to pass the GOP controlled House before it becomes law.

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