States require online sales tax collection !

The fact that states require online sales tax collection it’s not such a new or surprising idea. Discussions concerning this matter appeared several years ago, but this time it’s seems the pressure is bigger than ever.

A Supreme Court ruling bans collection of the sales taxes, unless the business has a store in that state. Currently, states are trying to find a way to obtain growing revenue, without breaking that law.
    There are many online retailer companies that don’t collect any taxes from their customers and apparently this is a serious problem for the states budget, because potential income is drastically reduced.

sales tax

According to Supreme court, stores like Wal-Mart should collect taxes from customers all over the world, no matter if they shop off or on the Web, because the company has a physical presence (a shop) in every state. But this rule can’t be applied when it comes to websites like, which is based in Seattle.

It’s kind of impossible to collect taxes from Florida shoppers, considering that they don’t have a presence there. The shoppers instead should pay the taxes to their state, but there are very few, who actually do that.
    Lawmakers from California, Illinois and Texas started to think about a strategy in order to force the online retailers to collect taxes from their customers.

Are you an online tax cheat?

As a response, and to give up some affiliates and redirected the traffic to others, in states where there is no threat concerning sales tax. In Colorado, online business owners are forced to either collect a tax, either inform their customers how much money they owe the state, by sending them a legal notice once a year.

It is not known yet how much money the states lost over the years, but there are definitely some wide budget holes, which can’t be covered soon, even it the requirements will be respected.

David Vite, head of the Illinois Retail Merchants Association says: “The choice of the merchant by the customer should not be based on tax policy. It should be based on service, convenience, on the shopping experience and, of course, price, but not price based on tax policy”

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Eli Wads is one of our expert authors in technology and business fields.Currently living in San Marino, Eli has graduated at Southwestern Academy with a Bachelor Degree in business in 2008. Contact him by dropping him an e-mail at

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