The Internet Tax Man Cometh (Again!)

03.06.2011
With the government still struggling with falling tax revenues as a result of the weak economy, proposals to do away with the are once again being talked about in the halls of Congress. A bill currently in the Senate dubbed the '' would do just that.

Internet retailers get around having to charge sales tax on purchases as long as they do not operate a physical presence in the state which they operate. For example, while Target and Amazon may sell a TV for the same price, it would actually be more expensive at Target's site because sales tax must be included.

An Overdue Idea?

Democratic Senator Dick Durbin is the bill's chief sponsor. He argues that the original purpose of the moratorium was to help the then-nascent e-commerce industry to succeed. Now that online retailers like Amazon are generating billions in revenue, it amounts to an unfair advantage for these companies, he argues.

"This idea is overdue," Durbin said. "Online retail sales are now very fulsome and are growing at the expense of local units of government." While Durbin may be right, the chances of it succeeding are slim. Republicans control the House and with a large portion of them part of the anti-tax Tea Party movement, it likely would be voted down.

In fact, one of the Tea Party's major groups, , is attempting to rally individuals against the bill.