Big Retailers Voluntarily Start to Charge Online Sales Taxes
NEW YORK - Several major retailers have voluntarily expanded the number of states in which they collect sales tax from Web customers, The Wall Street Journal reports.
The change represents another step in a movement by bricks-and-mortar retailers to persuade states and Congress to impose sales tax on companies such as Amazon.com Inc. that operate only on the Web. About 10 retailers with online stores last week expanded their collection of sales tax as part of an agreement with 37 states and the District of Columbia, under which the states promised not to press the retailers for back-taxes.
Retailers that joined the agreement are remaining anonymous to avoid being pursued for back-taxes by several states that didn't join the agreement, according to officials. However, Wal-Mart Stores Inc., Target Corp. and Toys "R" Us Inc. were among the retailers who stepped up their collection of sales taxes from customers last week.
Internet retailers generally haven't collected sales tax on Internet purchases unless they have a physical presence -- dubbed a "nexus," in legal terms -- in the state from which a Web customer makes a purchase. Tax laws are seen as giving Web-only retailers, with minimal operations in the physical world, an advantage over bricks-and-mortar retailers that also sell online.
Still, there is wide disagreement about what qualifies as a nexus, and online retailers have been inconsistent in their collection of sales taxes. Many physical retailers have structured their Web operations as separate subsidiaries to avoid tax liability. Increasingly though, retailers are blending their Web and physical operations in ways that could make them subject to sales taxes -- for instance, by allowing customers to order goods over the Internet and pick them up in stores.
The change represents another step in a movement by bricks-and-mortar retailers to persuade states and Congress to impose sales tax on companies such as Amazon.com Inc. that operate only on the Web. About 10 retailers with online stores last week expanded their collection of sales tax as part of an agreement with 37 states and the District of Columbia, under which the states promised not to press the retailers for back-taxes.
Retailers that joined the agreement are remaining anonymous to avoid being pursued for back-taxes by several states that didn't join the agreement, according to officials. However, Wal-Mart Stores Inc., Target Corp. and Toys "R" Us Inc. were among the retailers who stepped up their collection of sales taxes from customers last week.
Internet retailers generally haven't collected sales tax on Internet purchases unless they have a physical presence -- dubbed a "nexus," in legal terms -- in the state from which a Web customer makes a purchase. Tax laws are seen as giving Web-only retailers, with minimal operations in the physical world, an advantage over bricks-and-mortar retailers that also sell online.
Still, there is wide disagreement about what qualifies as a nexus, and online retailers have been inconsistent in their collection of sales taxes. Many physical retailers have structured their Web operations as separate subsidiaries to avoid tax liability. Increasingly though, retailers are blending their Web and physical operations in ways that could make them subject to sales taxes -- for instance, by allowing customers to order goods over the Internet and pick them up in stores.