Tax-Free Online Shopping is Coming to an End

Many people are used to the ease of buying online, especially with major retailers offering no sales tax.  That however, is coming to an end, as sales tax will be collected by Amazon and many of the other major online retailers, according to attorney Robert Wood, of Wood, LLP in San Francisco.  There are three federal bills out there and whether or not states will collect sales tax is what these bills are all about, says Wood.Source: www.forbes.com

Amazon.com has built itself in part on the lack of sales tax and the main reason to buy from them, as they've continued to build marketshare.  This is an emotional issue, says Wood, because people feel it's a new tax on them but it's not, as people just have to get used to it.  The most important Supreme Court decision came in 1992, after ruling on the Quill case, which involved an office supply catalog company.

Regarding the internet, the big question is what is the minimum com-tax?  What if you're just a small seller - is it fair to make a small seller collect use tax in a state like California or New York when you're sitting in a state like Arizona?  These are questions that have not yet been answered, says Wood.

For many online retailers, "the writing is on the wall, as sales tax is coming very soon," adds Wood.

To read more from Robert Wood, click on his Forbes article.  Robert Wood practices law with Wood, LLPin San Francisco and is a featured commentator with The Tax Law Channel, providing online, on demand tax law video content.