Will U.S. Congress put a stop to tax-free online shopping?

People who buy goods online from from out-of-state retailers don't always have to pay sales tax at checkout. Over the years, a succession of bills trying to force out-of-state retailers to collect those taxes have sputtered in the U.S. Congress. But this year, supporters of such legislation feel they may have a shot, given the dire budget situation of many states, Cnet reports. That could mean some changes for Amazon.com.

Cnet sums it up this way:

This is hardly a new debate: pro-tax officials and state governments have been pressing Congress to enact such a law for at least seven years. They argue that reduced sales tax revenue threatens budgets for schools and police, and say that, as a matter of fairness, online retailers should be forced to collect the same taxes that brick-and-mortar retailers do.

Even though those arguments have been unsuccessful so far, the National Conference of State Legislatures and its allies believe the recession has sliced into sales tax revenue so much that Congress will have to act.

Cnet said a new bill could be introduced by Monday.

Amazon collects sales tax in a handful of states where it has a physical presence. The company is embroiled in a legal battle in New York, which passed a law that establishes Amazon has a physical presence in the state through its relationship to locally based affiliate websites. Meantime other states looking to boost tax collection are eyeing the New York model.

Amazon is on record as supporting the Streamlined Sales Tax Project, an effort dating back to 2000 to simplify and coordinate sales tax laws across the states.

I've asked Amazon for comment on the new federal legislative effort.

 

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