What An Internet Sales Tax Will Cost You

The days of shopping at major online retailers like Amazon.com without paying sales tax could soon be history.

By Melanie Hicken @melhicken

The Senate is expected to vote on legislation next week that would allow the 45 states (and the District of Columbia) that charge sales tax to require online retailers to collect taxes on purchases made by their residents. If approved, the bill will move to the House.

So how would the passage of the “Marketplace Fairness Act” affect your online shopping? A lot depends on where you live. From California to New York, here’s a look at what you can expect.

What does the bill propose?

Big brick-and-mortar retailers with an online presence, such as Wal-Mart, already charge sales tax for web purchases. But in many states, you can still shop tax-free at Internet-only retailers like Amazon.com or Overstock.com.

Currently, these online sellers are only required to collect tax in states where they have a physical presence, such as a store or warehouse. But under the proposed law, states would be able to require online sellers to collect sales tax if they have sales of at least $1 million in states where they don’t have operations.

continue reading »