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Sales Tax Laws Could Affect Your Drone Purchase (and more)

In a recent article on The Hill, organizations are urging Congress to reject proposed legislation that would require out-of-state online retailers to collect sales tax. This comes as the online sales tax issue has come back into the spotlight due to a case before the Supreme Court.  Another proposed law could exempt certain drones from sales tax altogether.

Currently, if you make an online or phone purchase from a company that does not have a point of presence in your state, you are not required to pay sales tax. Supporters of the legislation say that the global sales tax measure is important because it provides a level playing field for brick-and-mortar retailers and allows states to collect sales tax that is owed to them. Further to this, State and Local governments have been pushing for a greater ability to collect sales taxes from internet purchases, as the growth of e-commerce has made it harder for governments to reach their revenue targets. They could cut their expenses, but that is unheard of in government budgets. Some online retailers that once fought to keep "no taxes" on their online sales have now come out in support of the online tax. Amazon is one example of this.

The company wants this new tax IMO because it has grown exponentially, with points of presence in most states and is now required to collect sales tax. For example, if you purchase something from Amazon and Amazon has a warehouse in your state, then you will pay your states sales tax on the purchase. If you purchase something on Amazon from a merchant that is selling on Amazon but does not have a point of presence in your state, then you do not pay sales tax. In this example, Amazon loses the sale, but gains commissions from the merchant using their systems. In the past, Amazon was against all sales tax but has since changed its position. The company negotiated with state governments to collect the sales tax in exchange for bigger tax incentives and to build and have a point of presence in their state.

Now that they have lost their online sales tax advantage, they want to regain that advantage over their online merchants and other small retailers not selling on Amazon by forcing all of the small retailers to collect the sales tax. Once accomplished, they can continue to dominate the small retailer with lower prices.

Submitted by Certified Training Institute Drone Instructor Greg McMaster

 


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