AMAZON, which became America’s biggest Internet retailer, used to go against collecting sales tax from its customers. On May 6th the Senate anticipated to approve a bill involving Internet wholesalers to collect sales tax due in other states. Politicians noticed that current law gives Amazon an unfair advantage. State governments reckon that tax avoidance by online retailers costs them approximately $11 billion a year.
Best Buy said its sales rose by 4-6% in states where Amazon started to collect tax. Smaller retailers, such as Blue Nile and EBay stated that having to collect tax could greatly harm their businesses.
Technology has created a broader way of thinking than taxation has embraced. If the Marketplace Fairness Act passes, online retailers’ profit will be affected as it would mean an increase in cost for their customers. Forcing retailers to collect tax from customers will make it harder for small businesses to grow into bigger businesses. Small businesses already find it hard to comply with America’s myriad local rules.