ATLANTA (AP) — Arneisha Hayes shops online sporadically,
for clothes, CDs, books and other things she can’t get in her
neighborhood.
The 29-year-old sometimes uses Amazon.com to make
her purchases. Before now, she hadn’t thought much about whether she
paid a state sales tax at checkout.
"Why would I pay a sales tax
to Georgia?" she wondered. "I mean, I know my computer is in Georgia,
but that company … they’re elsewhere. Would I pay a sales tax to an
online community? The rules get really funny."
Hayes is one of
millions of online shoppers who should be paying states sales tax on
their purchases, but often aren’t. That is expected to change later this
year.
Georgia joined other states this week in passing a law
aimed at collecting billions in lost sales tax revenue from online
retailers. The Legislature passed the measure as part of a comprehensive
overhaul of the state’s tax code. The bill now awaits Gov. Nathan
Deal’s signature. His office has suggested he favors the idea.
The
law would not technically put a new requirement on consumers. Online
shoppers who do not pay state sales tax at the point of sale are
supposed to file it on their income tax returns.
The legislation would require online retailers to collect the tax and remit it to the
state.
It
was among the recommendations set forth by the Special Council on Tax
Reform and Fairness for Georgians published in January 2011. According
to the report, online sales are a growing part of the state’s economy,
but the estimated revenue loss to Georgia from the inability to collect
sales tax on those transactions is $410 million in 2012 alone.
The
so-called "Amazon" law, named for the largest e-retailer potentially
affected by it, is part of a tax reform bill passed by the Legislature
this week. The statute covers retailer without a physical presence in
the state.
If signed by the governor, the section referring to Internet sales tax would take
effect Oct. 1.
New
York was the first state to pass such a law in 2008, and nine more
states have done so since then. Besides Georgia, they include North
Carolina, Rhode Island, Illinois, Arkansas, Connecticut, Vermont,
California and Pennsylvania. Legislation was introduced or pending in
several other states in recent months, including Kansas, Maryland,
Louisiana and Mississippi.
State auditors predict the tax will
generate more than $52 million for Georgia over the next three fiscal
years. Proponents argue the tax is in the spirit of "e-fairness."
"The
reality is that brick-and-mortar stores have a responsibility of
collecting sales tax from their customers at the point of sale," said
Rick McAllister, president of the Georgia Retail Association and a
proponent of the tax. "With the evolution of the Internet, most of our
members who have Internet sales collect tax on their sites, but there
are some who don’t. It’s not a new tax. What we’re asking folks to do is
collect the sales tax from their customers and remit it to the state of
Georgia just like all the brick and mortar stores do."
McAllister
said that all of his e-commerce members currently collect the tax, yet
they must compete with retailers outside the state who may not collect
it.
"This is really a collection issue, pure and simple," he said.
"It’s already owed by the customer. This levels the playing field for
our members, who are doing the right thing."
Amazon.com and Overstock.com have challenged the New York Law.
The National Conference of State Legislatures opposes such legislation at the state
level, and is lobbying for a federal law.
"States
want to go after this money that’s owed to them, which is
understandable," NCSL lobbyist Max Behlke said. However, he said, unless
federal legislation is passed that gives states greater authority to
collect the tax, states will continue to miss out on billions in
revenue.
Georgia Revenue Commissioner Doug MacGinnitie has urged
the state’s consumers to be proactive about paying sales tax on online
purchases. During the last holiday season he reminded shoppers that when
state sales tax is not charged by such retailers, it becomes the
purchaser’s responsibility to remit the tax on the purchase. Currently,
those who make online purchases without paying sales tax can pay using
an online form on the department’s website.
MacGinnitie declined to comment on the law, since it has not yet been signed by Deal.

"We
believe that more and more states will pass similar laws, as e-commerce
becomes a bigger piece of the retail pie," said Deal spokesman Brian
Robinson. "It’s unfair to tax Georgia job creators but not their
competition. Eventually, it will have to be taken up on the federal
level."
Even when the rule takes effect, Hayes said she doubts it
will deter her from shopping on the Internet, since she’s mainly in it
for convenience.
"If I wanted to save money, I’d probably just go
to a bricks and mortar establishment," she said. "I’m paying so it shows

up at my doorstep. If there’s an extra surcharge, I probably won’t even
notice that I should be upset about it."
Copyright 2012 The Associated Press.