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Study: Internet sales tax would cost consumers billions

Grant Gross | Nov. 7, 2014
Legislation allowing cross-border Internet sales tax collections would cost US shoppers US$24 billion in 2015, an antitax group says.

Because of varying sales taxes across states, residents of some states would see significantly bigger tax bills because of the Marketplace Fairness Act, the NTU study said. Louisiana online shoppers would pay an additional $849 in sales tax per year, Nevada resident would pay $620, and California residents would pay an extra $594 a year, the study said.

Residents of four states -- Oregon, Delaware, Montana and New Hampshire -- would pay nothing because their states have no sales tax. Alaska online shoppers would pay only $22 a year if the bill passes.

The Marketplace Fairness Act would allow states to collect sales tax from large Internet sellers that have no presence within their borders, making it more difficult for Internet shoppers to avoid sales tax. Currently, online retailers only have to collect taxes in states where they have a physical presence, including retail stores and warehouses.

Lawmakers have been fighting for more than a decade to pass Internet sales tax legislation, and some businesses have called on Congress to fix the problem since a 1992 Supreme Court case that prohibited states from collecting sales tax from sellers that have no physical presence within their borders.The court left an opening for Congress to streamline sales tax collection and allow out-of-state sales tax collection.

 

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