Another Tax?

I know that the use of the word ” taxes” is off limits these days in Washington and state capitals, but it looks pretty likely that there will be a new tax coming to your pocketbooks soon.

The US Senate and probably the House of Representatives will vote for a change in the tax laws that permit states and localities to tax Internet sales. Feeling enormous pressure from small businesses around the country, even staunch conservative Republicans are coming on board to support the Internet tax legislation.

Small businesses have convinced lawmakers that they cannot compete with the big corporate entities that have used the Internet to change the buying habits of Americans and in the process reap the monetary rewards by not charging state sales taxes.

So in the coming months, if the legislation passes, users of the Internet who everything from books to DVDs to clothes and toys will be paying a sales tax to the state where the purchase originated. Those companies that do less than one million dollars in annual sales will be exempt from the new proposed law.

It is certain that the new law will not be popular with the stay at home set who sit in their bunker and surf the “net” for bargains and then legally avoid the sales tax charge. But for the small ” Mom and Pop ” businesses that do not have the corporate reach of the big retail players, a more level playing field will emerge and of course provide a new revenue stream for many cash-strapped states.

Republicans have had many sleepless nights over this new tax proposal, since they have championed the cause of no new taxes and smaller, less intrusive government. But Republicans have also championed small business as the ” engine of economic growth” and a key base of electoral support. Since it is usually impossible to have it both ways, it looks like the Republicans will buy into the Internet tax scheme.

My advice- buy now over the “Net” before the tax man cometh.


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