Should You Pay Tax When You Buy Online?

A bill to let states impose sales tax on big online retailers passed the U.S. Senate Monday. Minnesota Sens. Amy Klobuchar and Al Franken voted for the Marketplace Fairness Act, as did many Republicans.

Why should online shoppers pay sales tax? Why or why not? Leave a comment below.

You could pay the same sales tax for online purchases as you do for shopping at a physical store if a bill that passed the U.S. Senate Monday becomes law.

The Marketplace Fairness Act would allow states to collect sales tax from retailers with more than $1 million in annual gross sales to out-of-state customers. Sens. Amy Klobuchar and Al Franken (both DFL-MN) voted yes, joined by 67 other senators including 21 Republicans.

Minnesota Revenue Commissioner Myron Frans praised the Senate action in a press release:

"This legislation levels the playing field for all those Main Street businesses in Minnesota and across the country. It also helps large retailers like Best Buy and Target that serve as 'showrooms' for shoppers who test products at local stores then buy them online without paying sales tax."

Also backing the online tax are owners of smaller businesses—such as Roberta Bonoff (pictured), president of Creative Kidstuff, with stores in Maple Grove, Southwest Minneapolis, Edina, Wayzata, St. Louis Park and St. Paul.

But collecting taxes for 50 states would be "a nightmare," one online retailer told NPR: 

"Something gets exchanged and it's sent to another state. Then we have to figure out how to refund the taxes from the first state, collect our refund from that state, then charge the customer the new tax."

Should you pay tax for what you buy online? Why or why not? Leave a comment below.

Chris May 08, 2013 at 06:35 PM
I disagree with taxing online purchases. If this goes through then there will be no advantage to buying online and buyers will stop making online purchases. When you look at it local business's have the advantage of the customer being able to come to the store and look at the product. The online sellers have the advantage of saving the customer on tax. If the online sellers get taxed then there will be no reason to buy online and online seller will be out of business. This is just a way for the Government to get more of our $$. If we are so bad off why the heck did we give Syria 100m?? This country is taxing the $hit out of people to give to other countries??? Why???
Celest Trosvig May 08, 2013 at 07:10 PM
I'm concerned about this passing. I am a small business operator with no physical location. All of my business is via the internet or at craft shows. For my shows, I collect and pay sales tax. However, I have no idea how I would keep track of the various tax rates in the areas I ship to or how I would go about the logistics of paying out the out-of-state sales tax. This would seriously impact my business practices.
C. Sanders May 09, 2013 at 02:10 AM
No Internet tax.
AlPatch May 09, 2013 at 02:16 AM
Big companies are fine with this new law...they have plenty of resources. It hurts smaller retailers trying to develop an online presence. That and other tax increases for small business take us down the road of only having large businesses.
Mike B. May 09, 2013 at 02:39 AM
Governor Dayton would of course view you (along with all hard-working business owners) as troublemakers and "rude." Minnesota businesses are fleeing this state because of its socialistic politicians and their liberal lackeys. While this is national legislation, the two sad excuses this state has for US Senators, Klobuchar and Franken, are as usual promoting policies injurious to Minnesota business owners.
wayne e burkhalter May 09, 2013 at 04:07 AM
web. online retailers have less overhead. that is why there prices are lower. not paying sales tax is a plus but not a game changer. the states just want more tax.
Chris May 09, 2013 at 03:17 PM
If you have >$1M in annual gross sales to out of state customers, this does not apply to you. Did any commenters read the article, or just see the word 'tax' and start complaining? Of course the states want more revenue- do you like smooth roads, fast police response, parks and snowplows? Personally, I like living in a first-world country and do not mind paying for the privilege.
Watts May 09, 2013 at 04:00 PM
You nailed it right here. There is a whole anti-tax mentality to some people that makes then cry tears of blood just seeing the word. There is no context or logic to any of it and forget about them understanding any logic for it.
Mike B. May 09, 2013 at 04:13 PM
Minneapolis has no smooth roads, has no fast police response, and the roads take forever to get plowed. Taxes go into the bottomless pit to support the grifters and "takers." The USA is fast becoming a second-world country because of the welfare-state that has been foisted upon the American people by President Obama and the shameless band of Democrat lackeys.
Ed Smith May 09, 2013 at 05:32 PM
It's truly amazing how we've survived this long with our meager services on the pittance that we are ALREADY paying to the state and federal government. We ALREADY pay local, county, state, and federal taxes for the things you mentioned. We could just have employers give the government everything from our paychecks. Why only 50-60% ALREADY? I'm sure they could find places to spend ALL of it. Why not!?
Albert May 09, 2013 at 07:51 PM
Why should a business that may be out of state or out the country have an advantage over say a business in our community. The issue is the goverment was slow to the internet sales game and is now just playing catch up. They are not proposing new taxes just leveling out the retail playing field. Support your local business that support your community, not some online company that might be in China, Europe,Etc.
Orono May 20, 2013 at 05:26 PM
Obviously you dont own a business. Stick to commenting on recipes and social issues.
Orono May 20, 2013 at 05:45 PM
"No context or logic to NOT wanting more taxes?" "I like living in a first-world country and do not mind paying for the privilege?" I dont care how arogant this sounds, but Im guessing I paid more in taxes this year than you both will likely make in 10 years. I have eliminated more jobs the last two years than I have created because of the tax burden. But hey, taxes are worth it because you two get the benefits from me paying them. Taxes dont matter to those that dont pay them. Liberals like you two clowns are always quick to point out the benefits of taxes. I am not against taxes, I am against higher taxes and more taxes. Unlike you two, I already support nearly everything I do, privately. I live on a private road that I pay to maintain. I send my kids to private school. The reality is, you need me more than I will ever need you. If you already had nice things, you know what it costs to pay for them. You wouldnt be making stupid comments about how you dont care what it costs. Of course you dont care. If you had money, and you paid taxes, you would care.
Orono May 20, 2013 at 05:48 PM
Albert, Great idea. Sadly though, the taxes this state puts on businesses prevents us from being competitive. If you can buy the exact same thing from a state that doesnt add the silly taxes, why wouldnt you do it? It is honorable to support local but the reality is that it is far too expensive sometimes to do it.
Orono May 20, 2013 at 05:49 PM
Mark Dayton has never had a real job in his life. Now he is in charge of telling us with real jobs how we need to go about running a business. Pathetic.
Nick May 20, 2013 at 06:51 PM
A quote from the article above: "Minnesota Revenue Commissioner Myron Frans praised the Senate action in a press release: 'This legislation levels the playing field for all those Main Street businesses in Minnesota and across the country. It also helps large retailers like Best Buy and Target that serve as 'showrooms' for shoppers who test products at local stores then buy them online without paying sales tax.' This mentality is what's ruining this state. They say something that base-level thinkers might see as noble, and use it to take more and more money from people. Why do they have to "level the playing field" by taking more from us? If they really cared about MN's competitiveness as a state and a "level playing field", they would eliminate our sales tax altogether. Then, guess what? We're competitive and people get to keep THEIR OWN MONEY and can afford to support local businesses. And good luck enforcing that internet sales tax. In case anyone didn't know, you are already supposed to be paying a Use Tax on everything you buy online, and guess how much that gets enforced. The following is quoted from the MnDOR website, "If you buy taxable items online or in another state, for use in Minnesota, you must pay Minnesota sales or use tax on those purchases. If the seller ships the items to you in Minnesota but does not collect Minnesota sales tax, you owe Minnesota use tax." NO ONE pays Use Tax, or this whole Sales Tax thing wouldn't be an issue.
Nick May 20, 2013 at 06:57 PM
Actually, a great number of online companies are small businesses here in America. Amazon Marketplace is mostly small businesses, and there is Ebay, as well as many, many small businesses that sell through their own websites. It is much easier for an entrepreneur to start an online business as opposed to a brick-and-mortar business because of the very low overhead and the dropshipping that they do allows them to have no warehouse and to not buy any stock they haven't already sold.
mike savick May 23, 2013 at 03:50 PM
The new practice is to go to a local vendor, view the product & take the sales staff's time and then buy on the internet. The local business sthe internet show room. How well does that work for small businesses?
Nick May 23, 2013 at 05:09 PM
That is a form of theft and it is morally wrong. It can't possibly be made illegal, but being that most people nowadays seem to be sociopathic little narcissists, I'm not surprised they don't realize or don't care what they are doing.
J.P. June 03, 2013 at 10:48 PM
I don't do a lot of internet shopping, but some of my recent purchases have been taxed by online businesses that are outside of my state. It can be done.
Mike B. June 24, 2013 at 08:59 PM
The system wouldn't be "out of whack" except for the fact that Democrats and liberals will go to a retail store, see a product, then buy off the internet. Why? Because Democrats and liberals have no idea of how free enterprise and the challenges of the small businessman.


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