Trade group: Expect big push for online sales tax

Online sales tax creates 'clear and present danger' to the Internet, NetChoice says

Steve DelBianco is worried that the U.S. Congress will soon pass a law allowing states to collect sales taxes from most online sellers.

An expected push for online sales tax legislation in Congress in 2013 is a "clear and present danger to the Internet," said DelBianco, executive director of e-commerce trade group NetChoice.

Three bills introduced in Congress during the past two years would allow states to collect sales tax from online sellers that have no physical presence there. Those bills have failed to pass, and aren't likely to pass in a lame-duck congressional session after November's election, but DelBianco sees growing momentum for an online sales tax.

"The chances are better than ever that Congress will do something to help the states collect more sales tax," DelBianco said.

NetChoice argues that an online sales tax would be complicated and expensive for businesses, with more than 9,600 taxing jurisdictions in the U.S. "Consider a catalog company in Montana who must now figure out sales tax rates and tax holiday rules in Miami," the trade group said in a new blog post. "Or a struggling artist who has to figure out tax rates across the country when he sells his paintings over the phone."

States have "false hope" in the legislation, but online sales taxes would raise a tiny percentage of most states' budgets, DelBianco said. And small retailers pushing a sales tax as an issue of fairness have their sights on the wrong opponent, he suggested.

"Small-town retailers are getting clobbered far more by Wal-Mart and Target than by the Internet," he said. "In fact, Main Street stores turn to the Internet to otherwise reach customers that would not come to their store."

States have not been able to collect sales tax on out-of-state sellers since a 1992 Supreme Court ruling.

For more than a decade, a group of states has been pushing to simplify sales taxes across the country in an effort to convince Congress to pass a sales tax law, but critics say there are still too many differences in sales taxes across the country.

Supporters of an online sales tax say it's not fair that many online retailers don't have to collect sales taxes while bricks-and-mortar stores do.

"As a former small business owner, it is important to level the playing field for all retailers -- in-store, catalog, and online -- so an outdated rule for sales tax collection does not adversely impact small businesses and Main Street retailers," Senator Michael Enzi, a Wyoming Republican and cosponsor of an Internet sales tax bill, said in August. "We never intended to give out-of-state businesses an advantage over those businesses that are a part of the community. Yet that is exactly where we sit unless Congress allows states the opportunity to fix it if they so choose."

States with sales taxes require residents that buy products online to pay sales tax, but few people comply or even know about those rules. Because those laws already exist, a law requiring online retailers to collect sales taxes would not be a new tax, supporters argue.

NetChoice included the online sales tax in its new Internet Advocates' Watchlist for Ugly Laws (iAWFUL), released Tuesday.

Also on the list:

-- A Pennsylvania Department of Revenue ruling that says any out-of-state retailer who places a paid advertisement with a Pennsylvania website or publication must collect state sales tax.

-- A push in New Jersey and Oklahoma that would allow executors to take control of the social media pages and email accounts of people who die, instead of allowing the service providers and their customers decide what happens to those accounts. Lawmakers "ought to respect the wishes of the dead," DelBianco said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles


PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?