Internet sales tax clears big hurdle in Georgia


The Georgia Senate joined the House on Tuesday in calling on online retailers to start charging sales taxes on their goods.

The Senate voted 49-3 for House Bill 61, which would require online retailers who make at least $250,000 or 200 sales a year in Georgia to either collect and remit to the state sales taxes on purchases or send “tax due” notices each year to customers who spend at least $500 on their sites.

The same bill easily passed the Georgia House last year. Because the Senate made some minor changes, the House will have to vote on it again by the end of Thursday — the last day of the legislation session — before it heads to Gov. Nathan Deal’s desk for his signature.

Its passage could mean an extra $500 million to $600 million a year in sales tax collections for the state and local governments.

The bill’s sponsor, House Ways and Means Chairman Jay Powell, R-Camilla, said the taxes are already owed, but many online retailers haven’t collected them. Mega-retailer Amazon is among the exceptions, agreeing to start collecting Georgia taxes several years ago.

States across the country have been tackling the issue in recent years. But they have run up against a ruling the U.S. Supreme Court made more than 25 years ago saying governments can’t force retailers to collect and remit taxes unless they have a physical presence, such as a store, in a state.

The original ruling came before the internet sales boom. Now it is a major part of the retail landscape. For instance, online sales hit $108.2 billion this past holiday season, according to Adobe Analytics.

Forecasters have predicted U.S. online retail sales could top $1 trillion a year in the next decade.

Senate Finance Chairman Chuck Hufstetler, R-Rome, said, “I think the internet is healthy and it doesn’t need any help.”

The Supreme Court agreed recently to reconsider the issue using a law passed by South Dakota’s Legislature for the express purpose of testing its legality.

The original ruling came before the internet sales boom. Now it is a major part of the retail landscape. For instance, online sales hit $108.2 billion this past holiday season, according to Adobe Analytics.

Forecasters have predicted U.S. online retail sales could top $1 trillion a year in the next decade.

Powell said the state needs to have its law in place to begin collecting money if the Supreme Court rules in favor of internet sales taxes in the next six months to a year. Without it, state and local governments could lose out on hundreds of millions of dollars in collections.

NetChoice, a trade group that represents Chinese internet retail mammoth Alibaba, Overstock.com, eBay, PayPal and others, has asserted that such changes have the potential to hurt small businesses and that Georgia’s proposal raises privacy concerns.

But Georgia lawmakers, some business groups and local government associations support the measure, saying it helps local stores that currently collect sales taxes on their goods and must compete against internet retailers who don’t.


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