By KC Morgan

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You drive to the nearest bookstore and purchase the newest celebrity biography, one you’ve been dying to read for weeks. Before you leave, you’ll pay for the price of the book and all applicable sales taxes for your state. Buy that same piece of literature on Amazon.com, however, and you probably won’t have to pay a sales tax at all.

How is this possible…and, is it something that should change? Should the Internet – and whatever you buy using the Internet – be taxable?

Internet Taxes and Sales Tax

A 1992 court ruling decided that corporations cannot impose a sales tax upon items unless the company in question has a physical presence in that state. For instance, if you make a purchase through Amazon.com (which has offices in Washington) and you live in Indiana, you don’t have to pay taxes on your Internet purchases…for now. For years, the issue of Internet taxes and sales tax on items purchased online has been a hot topic of debate among legislators.

Should the Internet Be Taxed?

Should the Internet be taxable? When you make purchases online, should you be required to pay your state’s sales taxes, no matter where the item you’ve bought is actually coming from? One of the reasons for buying online is the ease and convenience, with affordability often coming in as a by-product of these first two more important issues. It’s much easier to sit down at the computer and shop than it is to get dressed up and head out on the open road. The Internet has become a huge market, with e-commerce only growing every single year. Would Internet taxes start to stymie this growth? Would buyers continue to shop online if they had to pay an additional percentage in sales tax?

Most definitely, they would. Whether or not buyers would continue to shop online isn’t the real question. The real question is, where would such Internet tax money actually go? Would this be collected by the state where the buyer lives, the state where the online company keeps a physical office, the federal government in general? Adding an Internet tax to a very simple system only complicates matters, creating something more for lawmakers to argue over. Should the Internet be taxable? No, and for the simple reason that no one would be able to agree on which state gets to collect all that juicy revenue.

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