Shoppers Could Be Facing Online Sales Tax

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By Lisa Blackwell

Cyber Monday is less than two weeks away and online retailers are look at cashing in on the biggest shopping season of the year.

Customers are hoping to save by making some of those purchases tax free, but could that soon be changing?

Twenty four states already collect internet sales taxes and some say Alabama should join them, but not everyone thinks it's a good idea.

Justine Tyus, an online shopper, says, "If I'm charged taxes online then I might as well go to the store and purchase it and have it right then instead of paying shipping and handling and paying taxes on top of it."

Not all shoppers want to be taxed for online shopping but if all online retailers were collecting state tax it would create additional revenue for Alabama.

Cyber Monday generates around one and half million dollars from Alabama consumers.

Nancy Dennis with the Alabama Retail Association says Congress may take the first step in requiring online retailers to collect tax.

"There's actually a strong possibility that the legislation could come up in the lame duck session and be approved before the end of the year that's what we're really hoping for," said Dennis.

Some online retailers already collect sales tax but it's estimated that Alabama is losing two-hundred million dollars per year in state tax revenue because of those who don't.

Dennis says retailers are in favor of the tax because it levels the playing field for everyone.

"It puts small business owners at a disadvantage against large internet retailers because that large internet retailer is able to sell the same product and charge, have the consumer pay less," said Dennis.

State Representative Joe Hubbard says if legislation passes at the federal level, it would require action by state lawmakers before the state could collect.

"Should this measure pass through congress the Alabama legislature will have to pass a bill that authorizes the state to levy such taxes," said Hubbard.

Hubbard says if this legislation passes, shoppers can expect to pay the same amount of state and local taxes for online purchases as they would pay at a local store.

Hubbard also says if the legislation passes, it's possible shoppers could be paying taxes on internet purchases this time next year.

 

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