Two bills working through Congress could see the existing loopholes allowing to skip out on paying sales tax from online retailers closed. This is being done in an effort to create a more fair market atmosphere between traditional and remote sellers. It might not matter though, considering that online consumers won’t be forced to pay sales tax anytime in the near future. Current Sales Tax Policies. In the past remote retailers have been accused of having an advantage over traditional brick-and-mortar businesses. This is due to the fact that online sellers are only responsible for collecting sales tax in states in which they have nexus.
Since most of the sellers are located in very few areas and service consumers globally only a small percentage of business done is subject to sales tax. Thus, enabling them to offer more attractive prices in comparison to businesses offering local purchases. Consumers are supposed to keep track of their online purchases and pay the appropriate sales tax when they file their income tax, but the number of individuals who do is close to zero. In the past year Amazon, the massive online retailer, has been pressured to make agreements with states to begin collecting appropriate sales tax for transactions carried out on their site. To the point that most Americans participating in online shopping through Amazon are paying sales tax. However, there are still many more online retailers that have not had to begin collecting sales tax on out-of-state purchases, which gives consumers sales tax-free options if they are willing to go find them.
Online Sales Tax In The Future. If either the Remote Transaction Parity Act or the Marketplace Fairness Act were to pass nearly all sellers would be required to collect sales tax. Although, the passing of these bills does not look likely at least not for a while. Even if the acts do manage to become law there will be at least a 12-month delay before sellers will be required to collect sales tax in order for e-retailers to have time to make their operations in line with the new requirements. With that in mind, if these acts suddenly gain a massive amount of support in Congress the earliest that online consumers would see changes is 2017, and that’s if they pass anytime soon. Should your online business be collecting sales tax? Maybe, maybe not Sales Tax DataLink offers free evaluations to our readers to make sure they are complying with their sales tax obligations. Allow us to check your records and help you spot any compliance problem areas before you report!