If the Main Street Fairness Act passes Congress, your ebooks smorgasbord will come with a side of sales tax. The growing fight between web retailers and the various states who want to collect sales taxes has caught the attention of Congress.
Online purchases fall into a carefully created crack in the tax code. Buyers need to pay sales tax, but there’s no easy way to collect it from them, so sellers are required to do so. But if a seller doesn’t operate in a given state, it doesn’t have to collect the tax for that state.
This disconnect between collecting and paying sales tax has long been known, but it was left in place to support and nurture a fledgling industry. That was a good idea for when the web was just getting started, but do you really think Amazon still need the protection?
With a new bill before Congress, this might change. The Main Street Fairness Act was originally proposed in July 2010, but it doesn’t appear to have gone anywhere. But the bill seems to have resurfaced this year in the wake of the fighting between Amazon and Texas, Amazon and Illinois, and Amazon and Tennessee. (TBF, it’s not just Amazon; they’re just the most visible because they’re the largest.)
Of course, this new law might have one interesting side effect. It could push more people to buy from overseas, where they might not have to pay the sales tax.
image by Paul-W