States look for slice of internet sales tax

Revenue hungry states and local government have come up with an unlikely ally in their efforts to collect sales tax from internet retailers: business groups.

An article in the Los Angles Times  explains how businesses in California and elsewhere are supporting legislators’ efforts  to redefine what makes a “physical [retail] presence” in a state or, in some states, require e-tailers to hand over their customer lists.

California officials estimate that almost $1.1t billion in state sales tax from on-line and catalog sellers goes uncollected each year. Shoppers are supposed to keep track of purchases and pay the sales tax at the end of the year, but few do.

Colorado and New York are also looking at ways around the 1992 U.S. Supreme Court Decision that set up the system this way.

Meanwhile, brick-and mortar retailers – who must pay sales tax because they have a “physical presence” in a state – claim that Amazon, Overtock, and other large e-tailers draw consumers seeking a sales-tax discount, giving them an unfair competitive advantage.