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Web Tax Issues
STR PPED STATE legislatures, hungry for new revenue, are looking to tax ecommerce sites such as Amazon. With new laws in Texas and California recently enacted, Amazon is fi ghting back by let ing go of affi li- ates in California, fi ling suit in New York, and threaten- ing distribution centers in Tennessee and Texas. Most recently, Amazon has joined a movement to repeal the California tax through a direct referendum. Yet in the midst of this state-by-state war, a proposal for a national solution has gained steam. According to the Economist, one problem is that,
“America has some 8,000 diff erent sales tax jurisdictions that are constantly changing their rules and are not even aligned with zip codes.” T e federal Main Street Fairness Act is at empting to solve that problem by streamlining and simplifying state sales tax regulations. It would then make it easy for e-tailers to collect sales tax for multiple states, say supporters, and would address the issue of forcing an ecommerce merchant to fi gure out how to
implement sales taxes for multiple jurisdictions. Conservative pundit Ramesh Ponnuru off ers a dif-
ferent solution. In a Bloomberg column he suggests, “origin-based sales taxes,” would be more fair. “A far bet er solution would be for states to levy sales taxes based on where products are coming from, rather than on where they’re going, or for Congress to tell them to do so. Under an origin-based tax rather than a destination- based tax, for example, Washington state would have the power to tax
Amazon.com’s sales. For physical stores, sales taxes would continue to be collected as before,” he says. “T is would be a much simpler tax system, with lower compliance costs. It would tend to constrain sales taxes by increasing competition among the states. A state that raised its rates too high would induce businesses, particularly catalog or Internet businesses that can sell remotely, to locate elsewhere.” Meanwhile, the issue continues to make national headlines, with no clear cut resolution in sight.
International Ecommerce
BEYOND AMERICA’S borders, ecommerce continues to grow in terms of dollar revenue and online shoppers. Brazil’s growing middle class is increasingly shopping online for goods. According to a report on T eNex-
tWeb.com, 27.4 million Brazilians are web shoppers, and 4 million bought online for the fi rst time this year. Ecommerce in total generated $5.2 billion in the fi rst half of 2011, a rise of 24 percent compared to the fi rst half of 2010. A study published by the European Parliament
says that more European consumers are turning to web stores. T e number of online shoppers has doubled since 2005 and, “the increase was largely due to ‘high growth’ in the number of people from countries where ecom- merce was already ‘widespread,’ and not from countries
in Southern and Eastern Europe,” according to a news report at
Out-Law.com. For instance, in the Netherlands, 91 percent of homes are wired, while in Bulgaria that rate is just 33 percent. T e European average is 70 percent. In Australia, there is growing concern that retailers
are not doing much with social media and are lagging behind in ecommerce, compared to other nations. In response, the Minister for Small Business is launch- ing a $700,000 program to encourage small businesses to open online stores. According to Pinstripe Media, “around 90 percent of Australian businesses have access to the Internet, but only 31 percent of micro-businesses and 53 percent of small businesses have a web presence or an online shopping cart.”
Find other great ideas for running your business at:
www.wholesalecentral.com/wholesale–news 16 October 2011
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