Congress Poised to End Tax-Free Online Shopping

by Tina Kells | April 17, 2009 at 05:37 pm

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The tax-free status of online shopping in the US may soon be a thing of the past if House Rep. Bill Delahunt, D-Mass., and Sen. Mike Enzi, R-Wyo., have their way. The two are expected to sponsor a bill to end tax-free online shopping.

The bill may be introduced in the House as early as next week and will require online retailers to collect and remit various local, state and federal sales taxes.

Based on research done for the Streamlined Sales Tax Project (SSTP), an initiative to make collecting taxes on cross state border shopping easier, the new bill will effectively end the days of tax free online shopping for shoppers in the United States, and possibly outside of it as well.

As of June 1, 2008, all online retailers have been obliged to charges local sales taxes on items shipped to anywhere in New York — and also charge tax on the shipping and handling.

Now the impetus is on to have it happen nationwide — and Congress is getting involved in what could be seen as a purely local issue.

"We will have the bill ready for introduction by next Monday," a spokesman for the National Conference of State Legislatures told CNet News in a story posted Wednesday. "We finalized the language and now we're working out the remaining issues and adding some new provisions at the request of various stakeholders."