Online Sellers Worried about How to Collect, Transmit Taxes
Byline: Tim Devaney , THE WASHINGTON TIMES
As Washington considers enforcing sales tax collection for Internet purchases, a growing concern among online retailers is how to collect this tax and remit it to state governments.
These retailers complain it won't be easy to collect taxes for nearly 10,000 state and local governments around the country and keeping up with each of their unique tax rates and codes. They're afraid that it will be so complicated it could hurt their bottom line, even forcing some smaller Internet sellers out of business.
State governments which are pushing for the collection say they will provide software that is designed to take care of this problem, but retailers remain skeptical.
They think it's really easy, 'We'll just give you the software to collect sales tax,' but it's hugely complex and burdensome for businesses to operate, said Connie Hallquist, CEO of Healthy Directions, a Potomac-based company that sells health products online.
Technically, shopping on the Internet isn't tax free, though many consumers think so. Shoppers are supposed to pay the money directly to the government each year when filing income tax returns, but most taxpayers don't realize this and the money goes uncollected.
The issue was ignored for many years, but now Washington is taking note.
In May, the Senate passed the Marketplace Fairness Act, which would require Internet retailers to collect sales tax.
The House is considering the bill.
As lawmakers get closer to finalizing the Internet tax bill, online retailers argue that the technology is not there yet for such a complicated bill. …