Hey small business, your tax reporting is about to increase substantially

ProJo cites the Center on Budget and Policy Priorities claiming the Amazon Tax is a good thing. You might also know that the CBPP provides the Poverty Institute with their research.

A national think tank says that all states should pass an “Amazon law” similar to those adopted by Rhode Island and New York to help recover sales-tax revenue that they miss out on through Internet purchases made by consumers.

“The action taken by New York and Rhode Island is an important strategy for states to adopt on their own behalf,” according to a report issued Thursday by the Center on Budget and Policy Priorities, a group in Washington, D.C., that focuses mainly on the impact of government budget decisions on people with low incomes.

The report says that the so-called “Amazon law” adopted by Rhode Island this year and by New York last year is an important tool for collecting taxes owed on Internet purchases.

Online purchases already have sales tax (user tax) and you’re supposed to self-report and pay it when you file in April. But that rarely (never) happens.

The Amazon tax forces online merchants to become tax collectors. If this takes hold, anyone who sells online will be filling out tax reports for each state. So if you think the paperwork is onerous now, multiply it by 50 times.  And the retailers firsts on the hit list know this:

In response to Rhode Island’s new law, at least three online retailers — Amazon.com, Overstock.com and BlueNile.com — have severed their links with their affiliates or associates in Rhode Island rather than face the requirement to collect Rhode Island sales tax.

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