The Boston Globe has joined the long list of news outlets—the Chicago Tribune, Los Angeles Times, New York Times, Sacramento Bee, and the Minneapolis Star Tribune—in calling for federal legislation to mandate the collection of online sales tax.
In an editorial published last Friday, the Globe outlined the current online sales tax situation and offered a point-by-point rebuttal of critics’ arguments against online sales tax.
We would like to clarify one point in the article that may cause confusion, however. The article states:
Proponents have argued that online retailers shouldn’t have to collect local taxes because they don’t benefit from the local services that those taxes support.
That argument is invalid for a reason the Globe doesn’t mention: Online sales tax is destination-based, which means that it has everything to do with the consumer’s location and little to do with the retailer’s location. No matter where the online retailer is headquartered, the sales tax consumers pay goes to their respective states.
It’s the consumer, not the retailer, who is key when it comes to sales tax. The consumer is paying the sales tax, which is going to the state or local government where the consumer is located and which helps fund community services there—all the retailer needs to do is collect the sales tax along with the consumer’s payment and pass it on to the government. So if a retailer is selling to people in a certain location, then that retailer needs to be prepared to collect sales tax for that location—just as they need to be able to ship to that location.
The editorial also offers this pointed remark:
Amazon and other big retailers should be able to afford the technology required to track and collect sales taxes across multiple jurisdictions.
However, that technology doesn’t need to cost anything. A free, easy-to-use solution is available for small and large retailers alike in TaxCloud.
With TaxCloud, online retailers don’t need to worry about the cost of “track[ing] and collect[ing] sales taxes across multiple jurisdictions.” With TaxCloud, there is no cost—its comprehensive sales tax management service is absolutely free.
- Calculates sales tax in real time
- Creates detailed monthly reports for retailers
- Automatically monitors the tax codes of all 13,000 tax jurisdictions and updates any changes
- Maintains exemption certificates for retailers
- Files monthly sales tax returns in the 24 states that are members of the Streamlined Sales and Use Tax Agreement
- And more!
TaxCloud is making it easy for all online retailers, not just “online juggernauts” like Amazon, to collect sales tax.