Online shopping isn’t only wonderfully convenient, but it’s also way cheaper than many brick-and-mortar alternatives: not only do online retailers not have to worry about many of the same day-to-day expenses of normal stores, but many of them also get to skip out paying sales taxes.
That could soon change, and it could be worth some $800 million to D.C., Virginia and Maryland. The Post reports that a pair of bills is making their way through Congress that would allow states to collect sales taxes on products sold online, closing a loophole that traditional retailers say has put them at a distinct disadvantage in the marketplace. It would also benefit local government coffers:
A University of Tennessee study estimates that the District would gain $72.5 million in unpaid sales taxes. Maryland is projected to add an extra $375.9 million in tax revenue, while Virginia could see gains of $422.6 million.
“It would be a great thing for the D.C. metro area — especially given the demographic of 20-somethings who do a lot of their shopping online,” said Kim Rueben, a senior fellow at the Urban Institute in Washington. “That’s a lot of tax revenue that D.C. isn’t currently getting.”
Opponents of the bills say that they won’t really make that much of a difference, though—all but two of the top 25 Internet retailers already collect sales taxes in D.C., after all.
The bills differ on what retailers would have to pay the taxes and how they would be collected, but they have both garnered support from online retail heavyweights such as Amazon and eBay.
Martin Austermuhle