Government May Require Sales Tax For Online Purchases

8:25 PM, Apr 23, 2013   |    comments
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Greensboro, NC -- When you purchase goods online, you can often save money. However, you might not save you quite as much money anymore. That's because Congress is debating legislation that could force online retailers to charge you sales tax for purchases made online.

Experts estimate online shopping costs North Carolina anywhere from $70 to $137 million a year because so many websites do not charge sales tax.

Maribeth Hudgins owns a local shop in Greensboro called Dress Code. She's also the president of Triad Local First, a group that encourages people to buy locally. Hudgins admits shopping online can save money, but she argues buying locally benefits the community in more ways than one.

"You have interesting shops. You have interesting services. You have interesting restaurants because people support them. If they don't, then everything becomes a big homogenized blob," Hudgins said.

Keep in mind there are more than 9,000 different tax rates in this country. Figuring out a way to make it easy to for businesses to determine what to charge is a challenge. But, the current bill does exempt businesses that sell less than one million dollars worth of goods out of state.

The idea is designed to boost local economies, but experts warn, it could also have the opposite effect.

"Any time you add tax to any process, it takes money away from discretionary spending. Tax is a drag on the economy. It hurts. It slows down the economy," Certified Financial Planner Michael Wittenberg (CFP, ChFC, CRCP, REBC) said.

Raising taxes is never popular. However, Wittenberg argues forcing retailers to charge taxes for online shoppers is an easy way to get extra money without the backlash of a typical tax increase.

Congress is still debating the bill, but it seems to have more support now than in the past. Right now, you are, technically, supposed to report what items you buy online and then pay taxes. However, most people don't do that.

WFMY News 2 also searched through deal websites to see what items they say you should always try to buy online. Experts all have different recommendations.

Here are a few that stand out:

• Toilet paper. You can buy it in bulk and save a lot of money. 
• Books. Whether it's Amazon or even a traditional bookstore like Barnes and Noble, the online price is often cheaper. 
• DVDs and Bluray discs. 
• Clothes. 
• Small electronics, especially cell phone car charges. 
• Pet food.

However, it's important to remember that when you do buy online, you hurt local businesses. Every dollar you spend online takes away from our local economy, which can cost jobs and ultimately force some businesses to close.


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