Online sales tax

Online sales tax is a tax that is required to be collected in some states by the seller. The buyer is responsible for the payment of the online sales tax, but since it is very hard to "catch" the online sales tax on every item sold online, the administration pursues a model in which the online sales tax is collected by the seller.

California online sales tax

The California legislature last month passed a law requiring online retailers to collect sales tax the same like merchants physically located in the state. This Californian law was intended to close a loophole. The loophole was that online retailers sold their wares but not collect and pay sales tax to the state.

The online sales tax law found a quick response. Amazon hoping to comply with the new law and still avoid collecting taxes severed ties with thousands of California businesses whose Web sites sold products on its site. For the state of California, this has alegedly led to $83 million loss in tax revenue.

Some lawmakers already realize that the collection of online sales tax by states facing budget deficits is an issue that threatens to spill across the country. The goal of the online sales tax coalition is to provide uniformity in the online sales tax collection.