Internet Sales Tax Law Coming for Online Shoppers
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UPDATED: Aug 29, 2012
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Live in California or Pennsylvania? Love shopping online? Well pay attention! Starting in September, 2012 internet sales tax law is changing in Pennsylvania and California, and online shoppers will need to pay a tax on all of their purchases.
In Pennsylvania, online shoppers will pay a 6% or more sales tax (depending on the county) for any item they buy over the internet. In California, the internet sales tax could be even higher, and will give the State several hundred million dollars in revenue.
For those of you breathing a sigh of relief because this tax does not apply to you, don’t get too comfortable! Not only are several other states eyeing changes to their internet sales tax law, but the Federal government has begun to take note of the issue. Congressional support has been growing for a federal online sales tax, and large retailers such as Amazon and Overstock are working with lawmakers in Washington as the topic moves forward.
Technically, consumers in many states are required to include on their tax returns the sales taxes for items purchased online, but most people do not do so. Additionally, most online distributors do not charge sales tax unless they have a physical presence, such as a warehouse, in the state where the buyer lives. These gaps in internet sales tax law are coming to an end, however, as state and federal lawmakers across the country begin passing legislation to require all online transactions to be taxed.
While online shopping is still going to be popular and convenient, do not expect it to be free of sales tax for much longer. As internet sales tax law works its way into state and federal legislation, keep yourself informed of the issue and prepare yourself for the effect it will have on your life.