eTaxes Much Opposed, But May Be Inevitable

Chances are that if you’re a home-based or other small business or franchise owner, especially one who conducts most of your business online, you’re all too familiar with “eTaxes” and the impact they currently have and will have on your livelihood in the coming year or so.  For those reading this who haven’t yet heard this relatively new term, it refers to the full gamut of taxes paid on some form of electronically based commerce, such as products sold over the Internet.

A Rasmussen poll conducted just this past March reported that 63 percent of Americans are opposed to the taxation of online purchases.   And why wouldn’t they be?  Most consumers as well as business owners have become accustomed to the current way of doing things under the auspices of today’s Internet-purchase tax rules:  Sales taxes are only collected on items sold over the Internet to a purchaser if the business selling those items has a physical presence in that buyer’s state.  Of course, if you purchase or sell products or services from or to a state that has a reciprocal sales or other tax agreement with yours, then all bets are off and you do pay up.

Unfortunately, where reciprocity on taxes between states for Internet sales and purchases was once the exception, it’s now more likely than ever that it will soon be the rule.

Perhaps it’s no surprise that cash-strapped states across the country desperate for revenue are examining every feasible option when it comes to collecting more taxes.  Imposing a tax on interstate, Internet-based commerce is just one of many ideas under consideration.  Unfortunately, it’s also one that seems to be gaining traction, which may only be because all things when it comes down to it―and taxes are no exception―are often relative.

Unfortunately and despite consumer majority consensus and the constant lobbying of hundreds of Internet-based merchants of all shapes and sizes, the taxing of Internet commerce where there’s been what many would deem to be an unfair loophole for so long may be one of the less politically charged options out there.  By way of comparison, consider the resounding negative chorus of today’s workers when the mere thought of income taxes is raised.  Moreover, the homeowner response is one of complete apoplexy when it comes to increasing property taxes or, worse still, eliminating the sacred cow that is the home mortgage interest deduction.  Heck, even the “sin tax” opposition is gaining ground, as that’s a well that many people feel has been tapped too often already.

Of course, the organized effort to thwart the eTax threat is considerable in its own right.  Interest groups representing consumers, online commerce and merchants, businesses of all shapes and sizes, and many others are uniting in their efforts to inform their state legislators and Congressional representatives about the huge financial and administrative toll that the imposition of eTaxes will have on their bottom lines.

Their argument is that eTaxes are bad public policy for the primary reason that they are unconstitutional, but will also greatly impede interstate trade, put many states at a tremendous competitive disadvantage, put smaller online businesses and bloggers out of business altogether, and encourage even more illegal downloading of digital products.

For a comprehensive overview of the current status of the four types of proposed eTaxes and where they stand by state, as well as a really solid overview of and the most current news and debate on the most critical eTax issues, visit today!