Why is the White House pushing Internet sales taxes?
As shoppers hunt for online bargains this holiday season, many are wondering (and rightly so with the recent Supreme Court decision) how the battle over Internet sales taxes might affect them. Why, as one reader asks, is the White House pushing an Internet sales tax? Well, the answer might surprise you.
It isn't. And there's no talk of a tax at a federal level. But the Obama administration is siding with the states on whether states can collect sales taxes from online purchases.
In a different decision back in 1992, the Supreme Court ruled that states can't collect sales taxes from Internet sales unless the retailer has a physical presence in the state. This gives an enormous edge to online retailers. Local merchants have to collect sales taxes, making their goods appear more expensive to consumers. And states dislike giving up tax revenue.
A bill being crafted in Congress would require online retailers to collect state sales taxes. The White House supports the bill, which passed easily in the Senate in May. It has stalled so far in the House.
Want to know more? Click the video above to hear columnist John Waggoner's answer to this reader question.
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