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Tax-free Internet shopping may come to an end

By Catholic Online (NEWS CONSORTIUM)
December 6th, 2012
Catholic Online (www.catholic.org)

Online shopping is a very attractive option for many this holiday season. No long lines, no fighting over parking spaces - and best of all, no sales tax on many items! Do your Christmas Internet shopping online while you can, as it may be coming to an end very shortly.

LOS ANGELES, CA (Catholic Online) - The fly in the eggnog this season is that a proposed online sales tax has been offered as an amendment to the National Defense Authorization Act. As expected, this is an unpopular move for many, who say this will just further impede U.S. businesses - in particular, small mom-and-pop Internet stores that wouldn't exist otherwise.

According to Computer and Communications Industry Association President and CEO Ed Black, an online sales tax will burden small businesses, "some of the most promising candidates for future economic growth.

"This proposal, and other online sales tax collection proposals like it, would allow states to penalize the innovative e-commerce business model by targeting small online businesses as convenient sources (and collectors) of revenue," Black says.

The Marketplace Fairness Act, and its House counterpart the Marketplace Equity Act, seeks to clarify and perhaps overturn a 1992 Supreme Court ruling that requires retailers to have a physical presence in a state in order to collect sales tax on goods.

"Severing the relationship between taxation and physical presence would be a fundamental transformation in how we consider taxes," Black continued. "Such a significant step deserves more extensive consideration than attachment to the unrelated Defense Authorization bill."

Surprisingly, a recent poll has found that the majority of Americans support the idea, describing an online sales tax as "common sense." They also feel that a tax for online purchases would encourage people to buy local and keep tax dollars in their community.

"Local retailers invest in their communities and play a significant role in the overall quality of life in the places we call home," Betsy Laird, senior vice president of global public policy for the International Council of Shopping Centers says.

The tax would be problematic as collecting the tax across state lines poses as a challenge for small businesses that sell their goods in multiple states.

"It is not the job of small businesses to collect taxes to provide tax revenue relief for state and local governments outside their jurisdiction," Black says. He suggests that an online tax would protect existing businesses at the expense of consumers and growth.

 "We are optimistic that once the Marketplace Fairness Act is brought for a vote, it will have enough support to pass," Illinois Democratic Sen. Richard Durbin's spokeswoman, Christina Mulka says.

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