US to consider Internet Sales Taxation Law

Once again that question of ecommerce taxation arose due to the proposal to be made by Senator Dick Durbin intends. A Democratic aide plans to introduce a bill on Internet sales tax sometime this month.

"Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?" Durbin said in a speech in Collinsville, Ill., in February. "Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab."

According to the reports in the CNET News the proposal will likely be made public soon after Tax Day. It is expected to rewrite the ground rules for Internet and mail order sales by eliminating the ability of Americans to shop at Web sites like Amazon.com and Overstock.com without paying state sales taxes.

The new legislation will surely have serious repercussions because it would force companies who have online business to increase their prices which would in turn result in decreased sales. Customers usually give their preference to online retailers because of lower prices as compared to brick-and-mortar shops.

Now traditional retailers will have some advantage and get back their customers which could happen if online retailers like Amazon lose a key pricing advantage.