States seek to impose sales tax on e-commerce

All that money flowing through eBay and Amazon and so little of it is taxed. In a growing movement, state legislators want to find a way to tax that revenue, reports the Charleston Daily Mail.

Delegate John Doyle, a Democrat, who serves as second vice president of the national Streamlined Sales Tax Project executive committee, is looking into ways to implement a cyber-shoppers sales tax. He believes now that Congress is controlled by Democrats, there is a greater chance that a cyber tax law could pass.

As it stands now, most Internet shopping sites do not include state sales tax in the final cost of a purchase unless a buyer lives in a state where a store is physically located. Catalogs, however, are subject to the same 6 percent tax charged by other retailers.

Requiring Internet retailers such as eBay and Amazon.com to pay a cyber-shoppers sales tax won't be easy, as there are no real legal guidelines in place to enforce retailers to charge a state sales tax.

One study conducted by the University of Tennessee found that state and local governments nationwide lost up to $16.1 billion in 2003.

Already, more than 1,000 nationwide retailers already have volunteered through the multi-state Streamlined Sales Tax Project to collect states' sales taxes from online and mail-order transactions.