Contrary to popular belief, the internet is not a tax-free zone
in the US. On-line transactions are meant to be taxed; the problem
is that most customers don't know they're supposed to pay them and
states lack an effective enforcement mechanism to collect them.
Federal legislation currently requires retailers to charge sales
taxes if the buyer is located in the same state as the company. A
number of states also require that retailers levy taxes at the
places where their local bricks-and-mortar affiliates accept
returns or exchanges for products purchased on-line.
Because most on-line merchants maintain physical stores in few
places, they exempt customers from most states from paying
taxes.
Under the deal, which was the result of negotiations between the
retailers and state and local tax administrators, the participating
companies will collect taxes from on-line shoppers across the US,
and not just consumers living in states were the companies maintain
physical stores or distribution centres, The Washington Post
reports.
The names of the companies participating in the scheme have not
been disclosed, because that would enable the states which rejected
the deal - Arizona, California and South Carolina – to demand back
taxes from these companies.
However, Wal-Mart, Marshall Fields, Target, Toys R Us and
Mervyn's all posted new tax notices on their web sites in the past
week, according to The Wall Street Journal.
