Amid stressful economic conditions, vexing state budget deficits and continued troubles facing small business owners, the debate over how - and if - online retail companies should pay sales tax is mounting.
Texas, New York, California and Illinois are among several states pressuring online retailers to pay the tax, including Texas comptroller Susan Combs issuing a $269 million bill to Amazon.com.
Proponents of an online state sales tax argue that the condition gives an unfair advantage to online companies, hurts small businesses that are unable to compete with the lower prices that stem from not having to pay sales tax and discourages Texas LLC formation.
"Indeed, one problem of instituting online sales tax is the fact that there are literally tens of thousands of different city, county, state and special district taxing entities," writes Rhonda Abrams for USA Today.
"It's not merely a matter of figuring out how much tax to charge a customer but also for the retailer to have to file and pay taxes in every state of every customer," she adds.
Several legislative proposals have been advanced, including the creation of electronic funds depending on the zip code of the buyer and the establishment of a nationwide online sales tax.
Tags : ca, incorporation news, ny, taxes, tx
Posted: Mar 28th, 2011