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Congress May Soon End Tax-Free Online Shopping

We live in the times when a major portion of the world is still reeling from the after-effects of global recession.  And this has naturally led everyone to start thinking on the terms of austerity, cost cut-backs, greater taxes and similar other measures. A new bill in the Congress is seeking to further enhance the tax portfolio of the government. And the target audience, this time, is online shoppers.


According to reports, this new bill proposes to levy a tax on online shopping, which had been fairly tax-free so far. There are basically two reasons why Congress wishes to implement this tax: first, the state revenue needs to be increases; and second, that since online shopping is tax-free whereas actual shopping isn’t, people tend to prefer online shopping and this greatly undermines actual shopping stakes.

So far, online shopping stores have been able to thwart any taxes because a Supreme Court ruling in 1992 said that if a store is not situated within a state, it does not have to pay taxes. Although there are ways of levying tax on online shopping, for instance you are supposed to mention your online purchases when you pay state tax and then pay tax on those online purchases, most of the people simply don’t do it. And it would incur too much costs on the part of the state to keep track of all online purchases of all citizens.

Naturally, since the bill will directly affect the traffic of online shopping stores, a number of tech giants such as Overstock, eBay and Facebook have joined hands to protest and oppose the bill. Amazon, surprisingly, is supporting the bill.

Source: ABC News

Courtesy: Mashable

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