| If you sell on eBay, or if you have an online business, | | | | Currently, eBay sellers and online business owners are |
| listen up. There are several tax issues in the news right | | | | not required to collect sales taxes on items that are |
| now that could have a huge impact on the way you | | | | sold and shipped to customers in another state. |
| do business. | | | | If the state the eBay seller or business is located in |
| The first issue, and the one that is getting the most | | | | has a state or local sales tax, then you are supposed |
| attention, is Congress's push to get the IRS to force | | | | to collect sales tax on items sold and delivered to the |
| brokers (companies such as eBay and Amazon) to | | | | same state, but many people are not complying with |
| report personal data on their customers. | | | | these rules. |
| In this proposal, brokers (such as Amazon and eBay) | | | | Every state (and many localities) has their own sales |
| would be required to report names, addresses, and | | | | tax rate and rules, so the Streamlined Sales Tax |
| gross proceeds of each customer that completes | | | | Project was introduced to help simplify the collection |
| more than 100 separate transactions and generates | | | | and reporting of sales tax. Without some simplification, |
| more than $5,000 in gross proceeds each year. | | | | the cost to small businesses to comply with sales |
| Most likely, companies will report this information for all | | | | taxes would be tremendous. |
| of their customers because they won't know who will | | | | Finally, the Internet Tax Freedom Act, which was |
| meet the criteria above until the end of the year. | | | | created to promote the growth of the internet, is set |
| This proposal could cause problems for smaller | | | | to expire in late 2007. This act prohibits companies |
| companies. Not only will collecting this information be | | | | from taxing internet services, and if this act expires, |
| costly, but smaller companies may not have the | | | | small businesses would be hurt the most. |
| technology to keep this data safe from hackers. The | | | | States and local taxing authorities are eagerly awaiting |
| Center for Democracy and Technology is concerned | | | | the chance to collect taxes on internet services, but |
| about the safety of the personal data collected, and | | | | many companies, such as AT&T, Comcast, |
| rightly so, given how much fraud and identity theft | | | | NetChoice and others, are lobbying for a permanent |
| takes place today. | | | | moratorium on this tax. |
| The proposal could have a negative affect on | | | | All of these issues could have a huge impact on eBay |
| ecommerce, as some customers may shy away from | | | | and other online businesses, so if you make your living |
| doing business on the internet if they are required to | | | | online, you should keep your eyes and ears open for |
| provide Social Security numbers. | | | | news regarding these tax issues. |
| If passed, the proposal will be effective beginning | | | | Note: This article was written May 27, 2007. Tax laws |
| January 1, 2008. There is no indication that there will be | | | | change frequently, so please check with your tax |
| any retroactive treatment for the new law. | | | | professional if you have any questions about the tax |
| Secondly, state and local taxing authorities are pushing | | | | issues discussed above. |
| for the ability to impose sales tax on sales made online. | | | | |