End May Be Near for Tax-Free Online Shopping in Georgia

Tuesday, May 7th, 2013

Online shoppers could soon start paying sales taxes for the first time on many purchases, delivering hundreds of millions of dollars to Georgia’s state coffers, under a bill that easily passed the U.S. Senate on Monday.

The bill’s chances remain unclear in the Republican-run House, as some influential conservative groups such as the Heritage Foundation think tank and Grover Norquist’s Americans for Tax Reform have labeled it a tax increase.

The 69-27 tally for the Marketplace Fairness Act included yes votes from both Georgia Republican U.S. Sens. Saxby Chambliss and Johnny Isakson. Gov. Nathan Deal is firmly on board, but many of his former House Republican colleagues from Georgia are noncommittal.

The bill would empower states and localities to collect sales taxes from Internet retailers that do not have a physical presence in their tax jurisdiction. Currently, people who buy untaxed goods from Amazon.com and other such retailers are supposed to report the purchases on their state tax returns and pay up, but few do.

Proponents of the bill argue it helps brick-and-mortar stores compete more evenly against online competition. Foes say it amounts to a tax increase on consumers and burdens small online retailers with paperwork for thousands of tax jurisdictions across the country.

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