Could online shoppers soon pay more for their purchases? - Tri-State News, Weather & Sports

Could online shoppers soon pay more for their purchases?

Online shoppers could soon find themselves paying more for their purchases.  

On Capital Hill, Senators are debating a bill that would require large online retailers to charge state and local sales tax. Right now, most don't.

The bill is an effort for all states to collect sales tax and actually shoppers are supposed to report or pay taxes, but most do not either.

Right now, most online retailers charge a sales tax only when it is an in-state purchase.

"I have to charge if I sell within the state of Indiana, but right now, I don't have to if it is out of state," said Frances Cadora, a metalsmith.

Cadora is a metalsmith who sells her handmade jewelry online. She's been a metalsmith for 20 years, but has only been a business owner for a few months.

"The cost will go onto the customer clearly and it's just more paperwork. It's kind of frustrating," Cadora said.

Although Cadora sells her jewelry on her personal website, if she ever sells on sites like Amazon or eBay, she would have to charge the sales tax.

"It's already hard for a small business. They have a lot more advantages, they have a lot more tax breaks. It doesn't level the playing field, it gives the state of Indiana more revenue dollars. But I think if they want to encourage a stronger economy, they need to find ways to encourage small businesses," Cadora said.

Online retailers are divided. Amazon supports the marketplace fairness act, but eBay opposes it.

"The burden of collecting sales tax from 9,600 tax jurisdictions on interstate transactions, we think, is going to be cumbersome and ultimately hurt them," eBay President and CEO, John Donahoe said.

"The federal government should find ways to help not hurt these folks," Senator Mitch McConnell said.

State and local governments say they are the ones who are hurting. One study estimates missing out on about $23 billion in sales tax revenue last year. 

The Senate is expected to vote on the bill on Thursday. Its fate is less certain in the House where some Republicans consider it a tax increase.

Copyright 2013 WFIE. All rights reserved.

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