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Thursday, September 8, 2011

Internet Sales Tax and Amazon Cuts A Deal

The threat of a sales tax on internet goods may have gotten a short term reprieve. "Under the deal, Amazon would delay collecting taxes until September 2012, Assemblyman Charles Calderon (D-Whittier) said." Certainly good news for this holiday season, but it seems inevitable that a tax-free internet won't stay around for long.

The article also mentions what Congress might do. "If Congress acts by next summer to settle the contentious issue of how online retailers should be taxed, that decision would override Amazon's deal with California." How quickly Congress acts is always questionable and I wonder how best to divvy internet revenue. Would Congress use this as the first level for a national sales tax? Would a portion of those revenues than be divided across each state? And would an internet sales tax help our deficit or simply stop consumers from purchasing goods, a far worse outcome to be sure.

What is happening in California is most certainly expected to play out in every other state as well. And that will certainly be played out on the national political stage with a Presidential election coming next year.

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