E-Taxes and You

Believe it or not, by next fall everyone could be paying sales tax on on-line purchases and possible for broadband internet.

If these taxes are not created nation wide it’s said other taxes will be raised to compensate for losses that the government says they are currently facing. And it’s well known the U.S. government is in need for funds, to pay off the war debt and then some.

This isn’t shocking news to hear that the government is looking to create or raise taxes, it’s subject to say the only reason we haven’t been taxed for the internet and its services before is government is just to slow.

With this information is the government really losing as much taxes as they claim from on-line shopping? I know I personally only buy things over the internet that I cannot get locally…

According to shop.org 35% of people abandon internet purchases due to added costs (shipping and handling, etc.) already. (stats from the shopping year 2004)

But with at least 35% of people preferring a real store experience due to added costs, taxes will only drive that percentage up. This sales tax on internet purchases could be a huge thorn in the side on on-line retailers, either they will be forced to drop prices to make up for the difference or lose more business.

Though, the top reason to shop on-line was to avoid crowds. So I’m assuming that means the holiday season must be a great time for on-line stores, and will continue to be so even with an internet sales tax.

This internet tax also raises some questions: Will the taxes be based on delivery state or business state? Or will it be a national tax? What about foreign customers? Do foreign businesses need to have these taxes applied if the customer is a U.S. resident?

There are a lot of questions that need to be answered and it almost seems a little sticky to try to apply this kind of tax because of the global nature of the internet.

Let’s just wait to see how this pans out in congress.

Related Links:
Net Taxes Could Arrive by this Fall