Looper Reed has a number of good blogs. My colleagues Jamie Ribman and Cleve Clinton write Tilting the Scales which takes a light-hearted look at some of the more general legal issues of the day. For my lawyer readers, their hypotheticals will remind you of law school finals. They recently tackled the Internet Sales Tax debate:
The Tax Man Cometh to Cyberspace
Tilting the Scales in Your Favor
Make sure to consult a tax attorney or CPA if you have a “sales” relationship with any entity outside of Texas to make sure that the proper procedures are followed for collecting, reporting and paying state and county sales taxes. Rose’s penalties and interest for not collecting sales tax will be at least 9.25% if paid in 30 days and at least 14.25% if not paid within 30 days.
The Future of the Taxing of Internet Based Stores
Susan Combs, the Texas Comptroller of Public Accounts says Texas loses roughly $600 million a year from untaxed online sales. Taxation of internet sales is certain to gain increasing scrutiny from taxing authorities. Brick and mortar stores have long complained that online retailers have an unfair competitive advantage because of their ability to offer tax free purchases. States initially turned a blind eye to taxing of online sales and yielded to the complaints of online retailers about the complexity of collecting sales tax in 9,600 jurisdictions. Increasingly, states have become interested in this revenue source to augment shrinking state coffers with some of the hundreds of billions of dollars that Americans spend each year on on-line purchases. Recently, Amazon.com agreed to start charging sales tax in a number of states including Texas. The online giant, that had long opposed the requirement that online retailers collect sales tax, believes the issue should be decided at the federal level and has thrown its support behind the Marketplace Fairness Act which seeks to allow states to collect taxes from out-of-state businesses. While other online retailers, such as ebay and Overstock, oppose the legislation, it appears as though the age of tax free clicks is coming to an end.