Online shopping could cost customers more in sales tax


Online shoppers could pay more for their purchases

BOZEMAN, Mont. - Online shopping has made it easier for people to make purchases from the convenience of their own homes or send gifts to loved ones far away. Some people even avoid paying local and state taxes by purchasing items online.

A bipartisan group of lawmakers would like to require companies making over $1 million a year to charge sales taxes on all out-of-state purchases.

"It is exactly the obligation we have to level the playing field and make things fair," said Senator Heidi Heitkamp of North Dakota.

The National Retail Federation argues the current rules put brick and mortar stores at a disadvantage. Other lawmakers say it's not fair to burden small businesses with collecting sales tax from thousands of different jurisdictions.

"The Federal Government should find ways to help not hurt these folks," said Senator Mitch McConnell of Kentucky.

Susan McGee owns County Flower on West Main Street in Bozeman. McGee told NBC Montana her flowers are sent all over the country.

"We ship to multiple out-of-state locations so all the sales taxes are different in each state, as far as I know," said McGee.

McGee says she would not want her staff to be responsible for keeping track of which states charge various tax amount; therefore, she would have to adjust her system.

"I would be looking to a computer programmer to make sure I was set up so that the sales tax was automatically applied by zip code," explained McGee.

McGee said that would cost her more money, resulting in smaller profits and fewer jobs. State and local governments say they are the ones really hurting. One study estimates missing out on $23 billion in sales tax revenue last year.

"Every dollar that we don't have is a dollar that needs to be found through a cut or increase of taxes," said David Quam of the National Governor's Association

Senators Baucus and Tester have spoken out strongly against an online sales tax. The senate is expected to vote on this bill, Thursday.

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