My accountant informed this week me that legislation will be introduced this year which may finally resolve the internet sales tax issue. My current understanding of the legislation is that, under it, if you sell something to someone in a state that collects sales tax, you will have to charge sales tax for that place. It is not clear at this point how tax tables will be structured for simplicity and implemented given all the disparate state and local tax jurisdictions within the United States.
What is does appear to mean is that U.S buyers will no longer be able to avoid paying sales tax by purchasing items from out of state vendors, which is often the case with web purchases. This would seem to make internet shopping more expensive and perhaps create a pain for internet based sellers (home business or otherwise). While there are still details to be worked out, the questions loom: Will this degrade the internet shopping advantage to the point that U.S. web-based shopping will decline? Or will buyers shrug it off as a ‘death and taxes’ thing?
The legislation is excepted to be introduced in the 2007 session and if passed, would take effect July 1, 2008. You can read more about it at the Streamlined Sales Tax Website (link here).