ECommerce TaxEcommerce tax may well be a fact of life for online retailers if US state governments succeed in requiring these retailers to charge state sales taxes. In 2007, New York City's Independant budget office calculated $29 million dollars in state sales tax was lost to New Yorkers purchasing goods online. Typically, online retailers do not charge state sales tax. Ecommerce sales taxation would bring fairness say state governments because regular businesses who have buildings and stores are required to pay state taxes depending on the state they are located in. New York state for example, would have brought in almost $82 million dollars in state sales taxes if purchasers living there had been required to pay tax on all their internet purchases. In 2008, New York initiated a new law, referred to as the “Amazon Act” It requires major Internet retailers with facilities or business affiliates in New York state to charge 8.375% sales tax on purchases. Presently, online purchasers find that the lack of tax is a definite attraction to buying online. It's just one factor which helps keep online prices lower than buying at the local mall or store. You either remove state taxes entirely or apply the tax to everyone, in every state. It's most likely that one state after the other will draft online sales tax laws once they see how successful New York has been with the process. While the new law is presently bogged down by litigation it is hard to argue that it is unfair, especially if you are a store owner in New York state being undersold by an online retailer that does not have to charge the taxes that you do. Another topic that can cause ecommerce sites frustration is frequent sales tax changes. Governments all over the world reducing taxes as a means of stimulating the economy. But ecommerce systems are not usually very user freindly when it comes to changing tax rates. Unlike bricks and mortar stores, ebusiness stores have online advertising with prices and taxes shown in the copy. An ecommerce site might have literally hundreds of banners and advertisements that need to be changed every time a tax is raised, lowered or added. Only the largest ecommerce stores will have this pricing information recorded in a database that is easy to adjust or correct. The majority of stores will need to hire in html programmers to change all their banners every time a new ecommerce tax rate is changed. |