U.S. Senate Considers Taxing the Internet

It’s no secret you can get things cheap on the internet, but the U.S. Senate may tonight vote to level the playing field by introducing an Internet Sales Tax. At present, items sold across state lines aren’t subject to state sales tax, but if an Internet Sales Tax was eventually implemented, retailers would have to pay the sales tax in the state where the customer lives.


Good news for Alaskans, as of Jan 1 this year, Alaska was one of five states to have no state sales tax. But it could be bad news for sellers. We spoke to Johanna Bales with the Department of Revenue Division of Taxation…


Bales: “If they’re trying to say that because you’re  selling on the internet then that state where your product goes now has jurisdiction over you, then it could be something that could affect retailers within the state who are selling out of state.”


Bales said this would be a significant change in the way the federal government is involved in state sales taxes, and should be carefully considered.


Local log carver Derrick Stanton sells some carvings online, and while his business is currently small enough to fly under the threshold of $1,000,000 in internet sales per year, he said it was a concern…


Stanton: “Ultimately, when people go shopping on the internet, they’re looking for deals that they can’t get in their local area, and we’re able to provide those, but very time we add in a new cost – especially shipping already has a pretty big cost – we add sales tax to each state on top of that and it starts to drive the price back up to where they could purchase it locally, which is much more convenient.”


Senators Begich and Murkowski were unavailable for comment on this issue today.

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