Is This the End of Tax-Free Online Purchases?

Published on May 20, 2013

This month, after a many-year process, the Senate has officially passed a bill which could mean the end of tax-free online purchases.  With the "Marketplace Act of 2013", states will now have the authority to collect taxes from online storefronts.  Technically speaking, online purchasers were supposed to be accounting for these taxes on their tax return already, but as this was rarely done, this bill will account for the previously uncollected tax revenue.

Amazon is a supporter of the bill, as they have embraced a sales model which uses local facilities, and this bill would be useful towards that process. 

In contrast, both Etsy and eBay feel that this tax will be an inconvenience to small sellers - the threshold of those who would tax is currently set at businesses that sell $1 million and over, but Etsy and eBay feel it is too low.  Additionally, the White House supports the bill, and feels that it will help to "eliminate the unfair advantage currently enjoyed by big out-of-state online companies over local neighborhood-based small businesses." 

Will this help or hinder the online sales front community?  Should this tax be a regulated implementation?  Will this change your online shopping habits?  Is there a better way to "level the playing field" between the bog boys and the neighborhood-based businesses as it relates to paying or avoiding sales tax?