Congress is Considering Bill to Impose Sales Tax on Online Purchases

As everyone debates the great partisan divide in the federal government, there is some bipartisan legislation moving along in Congress without too much opposition from either side of the divide. If passed, the bill being considered would result in about 5 to 10 percent sales tax levied on purchases made over the Internet.

While this would level the playing field for businesses with a presence outside the virtual storefront, it would be a hardship for the U.S. consumers who, according to a recent story on CBS News, spent more than $200 billion in online sales last year. A reported 53 percent of Americans shop online, spending an average of $1,200 a piece. This is expected to rise to 58 percent by 2016 with an average expenditure of about $1,700 a piece.

Supporters, both Democrat and Republican, claim it is all about states' rights. If the bill passes, it would turn the issue over to the states. However, many believe it has a whole lot more to do with the substantial revenue that would flow into depleted state coffers that it has to do with states' rights. CBS News reports that if passed, it would raise an estimated $23 billion in additional revenue for states.

But at what cost?

According to Steve DelBianco, executive director of NetChoice representing Internet companies, the bill would weigh down thousands of small online businesses in a confusing web of new taxes.

"The big loser - small businesses," DelBianco told CBS News, "The same small businesses we're counting on to create the jobs to pull us out of the recession."

What do you think about this legislation? Do you think it's about states' rights or just another source of revenue for governments? If it passes, will it change your online purchasing habits?

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