The
article talked about the major challenge and benefit of requiring a sales tax
to be charged and collected by online retailers. The article diverged a little
onto talking about the political and socioeconomic reasons a large online
retailer like Amazon might be supporting the tax.
The
major challenge in charging and collecting the sales tax on e-commerce
transactions is the complexity of dealing with the multiple sales tax rates; which
often vary by county and city as well as State, both in rates and in what is
actually taxable. Part
of the issue is the fact that counties and states differ in both the rates and
the items that are tax exempt. The complexity of the project is challenging,
but will eventually be surmounted.
The
major benefit of sales taxes on e-commerce is the potential revenue that
governments could earn. In the early days of e-commerce, the costs of trying to
implement and enforce sales taxes far outweighed the benefits. But the increase
of the value of potential taxes created by e-commerce means that tax collectors
really do not want to see that potential revenue go uncollected.
The
government is trying to explore ways to tap into this potential revenue stream.
It will be some time before all the parts are in place to implement an online
sales tax. Aside from the need for technical innovation, is the fact that new
taxes are always unpopular. Public opinion may be the last bulwark against new
e-commerce taxes.
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