New Tax Problem Heads Our Way
May 08, 2008
Are we about to see the end of Internet commerce as we know it?
Sure the question sounds apocalyptic - it could be.
New York State will begin taxing transactions on the Web at the end of the month. This is in the form of requiring online merchants to collect sales taxes from sales to New York buyers.
How long will it be before other states, starved for tax revenue because of the recession and the real estate bust, implement a similar policy because they view online sales as the only ripe melon left to squeeze?
The Industry Council for Tangible Assets, which has led the fight against state sales taxes on numismatic and bullion coin sales, should once again be commended for the work it has already done and perhaps plan to gear up for yet more undertakings.
Take Wisconsin, my home state, for example. There are no reliable statistics as to how many coins Wisconsin collectors purchase online. The sales tax applies to their purchases.
Currently, the onus is on the individuals themselves to self report on their annual state income tax return in the form of the parallel use tax, which is basically the name given to the sales tax when it is paid by the buyer rather than the retailer doing the selling.
Compliance is not high. What happens when the Internet retailers get a letter telling them to collect the 5.5 percent (state and county) sales tax on future transactions involving Wisconsinites?
There have been silly alarms online for years about taxing e-mails, but this is a very real problem that could be coming at us.
Time to prepare.
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