US legislation on online retail taxes tipped

It’s not just Australian retailers who are in a funk about tax-free internet shopping.

CNET says a Democrat Senator in the United States plans to put legislation forward to stop the exemption from state sales taxes for websites.

The man named as behind the bill is Dick Durbin of Illinois. He asked in February: “Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?”

A Supreme Court ruling in 1992 said Congress was free to decide “whether, when, and to what extent the states may burden interstate mail order concerns with a duty to collect use taxes.”

But, only a company with a strong business presence in a specific state is compelled to collect sales taxes. Users of sites such as Amazon are required to pay their state’s sales tax rate and then report that amount at tax time, though few do.