Cyber Monday Sales Tax Free for Many - But For How Long?

 

I don�t do the whole Black Friday thing. There is nothing (and I mean nothing) that I want/need/crave/desire enough to stand in line with a bunch of total strangers � who may or may not have showered recently � to buy.

I do, however, do Cyber Monday, the online version of Black Friday. I�m not alone: according to a survey conducted for Shop.org by BIGresearch, 106.9 million Americans plan to shop on Cyber Monday this year. Cyber Monday, or the Monday after Thanksgiving, is considered the biggest online shopping day of the year. Stores offer bargains and deals and I can shop while sitting at the comfort of my office desk, sipping on a mug of coffee.

All of that shopping will translate to about $1 billion in online shopping on one day of the year. Much of that shopping will be sales tax free. A boon for shoppers, perhaps, but is it fair to brick and mortar retailers � not just the big box stores but Mom and Pop corner stores? Most Americans, believe it or not, say no.

Despite the fact that most Americans (and shoppers) understand the disparity, retailers are not quick to embrace the notion of collecting sales tax with Amazon.com leading the charge. The online retail giant has made no secret of its efforts (shored up with a number of lobbyists and legal teams) to avoid collecting sales tax at the state level. Other retailers which rely on an online presence have entered the fray while traditional big box retailers like Best Buy and Wal-Mart have joined forces with smaller retailers to protest what they view as an inequity.

Amazon.com, for its part, supports an alternative, the Marketplace Fairness Act. The bill, which is currently in Congress, has been referred to the Senate Finance Committee, and would essentially control the ability of individual states to collect sales tax. Interestingly, the wording purports to bolster the authority of states to collect by saying:

It is the sense of Congress that States should have the ability to enforce their existing sales and use tax laws and to treat similar sales transactions equally, without regard to the manner in which the sale is transacted, and the right to collect�or decide not to collect�taxes that are already owed under State law.

It starts off, good, right? It confirms that states should have some control over enforcement of their own tax laws. However, the bill goes on to require states that wish to collect sales tax online join the Streamlined Sales and Use Tax Agreement and follow a set of prescribed rules.

Hmm. More federal regulation? It seems antithetical to the states� ability to set their own rules with respect to collecting tax. And allowing Congress just one more iota of control over how the individual states are taxed � when they can�t even agree on a federal income tax � isn�t appealing.

I get that the current hodgepodge of laws can be confusing for taxpayers. And I�m not saying that a consistent set of laws is a bad thing. To the contrary, I think it�s a good thing for retailers and consumers to have a sense of rational, logical tax laws. It�s the drafting and implementation that worries me. Common sense? Consensus? Fairness? I just don�t know that I trust Congress to make that happen. Anyone else?

�

Want more taxgirl goodness? Sign up to receive posts by email, follow me on twitter (@taxgirl) or hang out with me on Facebook.