A: Short Answer: Internet Sales Tax is not a new tax, simply a largely uncollected tax.
A: Long Answer: Many taxpayers are surprised to learn that even though they were not charged sales tax when they purchased something online, they still owe local “use tax” on that purchase. Use taxes are the same rate as sales taxes (calculated as though the purchase happened at your doorstep). Unfortunately, collection and enforcement of use taxes is cost prohibitive – states revenue departments simply don’t have the resources to track down every iTunes download or eBay purchase.
The new laws being considered would eliminate the current taxpayer obligation (or liability) to report and pay use taxes for items or services purchased over the Internet.
The new laws would shift the burden of tax collection to the point of sale, exactly the same as if you walked into your local convenience store to buy some batteries.
Some Internet merchants have begun to complain that under these new laws, keeping track of all possible tax codes and jurisdictions would be simply too complicated. This is where we come in – at Fed-Tax.net, we are eliminating all of that complexity – at zero additional cost to the merchant or the taxpayer (thats’ right – our services are absoultely FREE)