Collecting Sales Tax Online

As the old saying goes, the two sure things in life are death and taxes. But old sayings are often oversimplifications. This can certainly be said of the question of whether or not to collect sales tax from the sale of a product on your web site.

One prominent law states that a physical presence in the state in question is requisite for the requirement of a web site to collect tax for an online sale in a given US state. But like taxes, there are many laws and more are added all of the time.

In the early days of the Internet and due to a well publicized 1992 Supreme Court ruling, many online retailers were given free passes to having to collect sales tax. This is changing as local and state governments realize what a cash cow they are missing out on.

The online retailer that may have benefitted the most from the original condition of merchants not in effect –or at least the lack of enforcement rendering it so– needing to collect sales tax is Amazon.

They have waxed fat during years of the above sales tax free environment. They did recently forge an agreement with the State of California to begin the process of collecting sales tax for tractions with residents of the Golden State.

The days of online merchants being able to milk that cash cow are ending fast. Congress and the Senate are addressing this issue in their relative domains with a certainty if not an alacrity. Though Republicans have long sworn not to raise or to create any new taxes of any kind, when it comes to tax on Internet sales, an exception appears imminent.

There are a few US states that do not require the collection of any sales taxes. After the federal government is through with the issue, the chances are good that, except in those lucky states, being able to elude paying a sales tax for an online purchase will go the way of the VCR and 8-Track tape into extinction.

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