Senate to vote on internet sales tax bill this week

If you often choose to buy from an internet retailer instead of your local shop to avoid paying sales tax, you may soon need to re-think your shopping habits.

As early as Monday, the U.S. Senate may take up the Marketplace Fairness Act. The bill would grant all states the power to collect sales taxes from out-of-state purchases.

Nine states currently require online retailer Amazon.com to record and pay sales taxes to them. This new legislation, proposed by Sen. Mike Enzi (R-WY) would extend that responsibility to all online retailers and all 50 states.

The law would certainly put a burden on many internet shops as each state has county-by-county and city-by-city variances in sales tax rates. Keeping up with so many will be difficult without expensive software or costly manual updates.

The bill hopes to even the playing field between internet an brick-and-mortar stores. As shoppers have learned that internet purchases do not incur sales tax, they often shop locally and purchase across state lines.

Current laws would require purchasers to pay sales taxes on these purchases by reporting the purchases on the annual taxes. Almost no one does.

As states have seen their tax revenues shrink during the lingering economic stagnation, they are eager to get their hands on the additional revenue.

Large brick-and-mortar retailers like Wal-Mart have been major supporters for the legislation and will likely lobby hard for its passage.