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Internet Sales Tax: Romney or Obama?

Which 2012 candidate for U.S. presidency will be better for online sellers?

You may already know who you will vote for in the U.S. presidential election this November. That decision is probably based on which candidate—Mitt Romney or President Barack Obama—you think will be best for the country, and for you as a citizen of this great nation.

But how will the election of one candidate or the other affect your business as an online seller?

The biggest issue on the table that affects online sellers is whether to have a national Internet sales tax. Two bills are in play right now that would implement a national sales tax, thus requiring online sellers above a certain size to collect sales tax on all of their sales, not just for sales to specific states.
Interestingly, both candidates would likely support an Internet sales tax law

The argument for passing this Internet sales tax law is that “Main Street” businesses, which have a storefront in local communities, are being harmed by big-box stores that sell online and don’t charge sales tax.

What this argument ignores is that many of these online sellers are actually people just like you and me, people making a living for themselves and their families by selling things on eBay, Amazon, Etsy or other sites. Depending on how the sales tax law is implemented, it could have a drastic impact on your business, one way or the other.

Comparing positions on a national Internet sales tax

So, how do the two candidates stack up against each other on this issue? Interestingly, both of them would likely support the sales tax law, but both would have reservations in doing so.

Romney does not want to be seen as advocating for taxes. Yet, on the other hand, he does have a close associate, Michael Leavitt, the former governor of Utah, who has advocated for increasing taxes on online sales.

Leavitt would be a likely candidate for Romney’s chief of staff. Thus, he might have significant influence on a Romney administration. Additionally, many other GOP governors have pushed for the Internet sales tax law under the argument that it would level the playing field between online and offline businesses, so the pressure would be on Romney to provide his support as well.

Like Romney, Obama has not made a specific statement about his support, or lack thereof, for these Internet sales tax bills. But, considering that many other democratic members of Congress are supporting these bills and have even sponsored them, it is likely that Obama would come out in support of the bills as well.

Action on Internet sales tax unlikely to come soon

Most online sellers are required to collect and remit sales tax to their states

These bills, while actively being debated, are not likely to pass before the November election because neither side wants to be seen increasing taxes. Given that both candidates and both parties have expressed support for the Internet sales tax bills, they are likely to pass at some point in the future, after the November elections.

For online sellers who are concerned about this issue, eBay Inc. provides information and support for sellers to learn about and advocate for laws, such as this one, that will affect e-commerce.

In the meantime, sellers should not forget to pay their state sales tax. Regardless of what is happening at a national level, most online sellers are required to collect and remit sales tax to their states.

Outright.com has a free bookkeeping tool that will allow online sellers to track how much they have collected in sales tax, and to look at a Sales By State report that shows how many sales they have made in their state, so that they can calculate sales taxes owed.

About the author

Laura Messerschmitt
Laura Messerschmitt is the vice president of marketing for Outright.com, an online bookkeeping service for online sellers. Opinions expressed here may not be shared by The Online Seller and/or its principals.

  • Pkbeads

    it is blatantly ignorant of you to name the candidates for us ~ when there has been no decision as to who will be on the ballot !! SHAME ON YOU. I will be voting for Ron Paul ~ and the fact that you have failed to recoginize his legitimacy as a candidate is offensive

    • guest

       haha – yes, all of america fails to recognize his legitimacy as well.  Why is that?

  • Guest

    Those 2 aren’t the only choices for President.   The obvious choice is Ron Paul. 

  • Zenmarinemicrocosms

    Someone please explain to me why I should collect and pay sales tax when I am selling my personal collection of items I already purchased and paid sales tax on?

    • bc Obama needs to distibute your money

  • Gr8fuel

    eBay has seen more tax laws past since Obama has been in office! Pretty much dont think he has any concern about any small business person, Mitt in my opinion would be more business friendly. As a seller on eBay and on the local level the last four years doing business in California has been a nightmare! Its apparent Brown and Obama have a social agenda, Robin Hood syndrome. It does not work! well except for those that do not care to work…And why should used items be taxed? really! its already been taxed, maybe i just dont get it?

    • CSN

       I agree with you on your remarks. 

      • Dml2000AF

        and also a big proponent of outsourcing jobs overseas whereas Obama wants to bring industry home… I’m in the Obama camp even if she snares internet commerce – why should people selling on the internet escape paying taxes?  Heck, I have to pay taxes even if I have a tag sale in my own back yard on stuff I just want to rehome – even if I make pennies on it!!

    • Kgbkgb1968

      There have been no taxes added for the middle class or small business under Obama.

  • Tommy

    The argument that internet sellers have an advantage in pricing over brick and mortar stores is flawed. If I buy something online, I have to pay for shipping and handling that a brick and mortar store does NOT have to charge for. So except in the case of a very small item, with a very high price tag, the costs are probably a wash. The fact that politicians like a new TAX on internet sales doesn’t surprise me a bit. They see a growing number of internet sales dollars that are slipping through the cracks untaxed. That can NEVER be allowed to happen in Taxamerica…

  • Privateer2001

    All I would like to be able to do is recycle stuff I have no use for myself. I have already paid money for all of the things I am putting up for resale, including what I have paid over the years to store my stuff. Unfortunately, laws like these will squeeze out anyone who wants to live in a sustainable world and recycle useful things by making it harder to sell things online unless you’re a business. Paypal has already taken steps to ensure everyone is in lock-step for whatever our benevolent government is going to hand down. Basically, I feel many will be squeezed out because there will be no money to be made on eBay unless you’re a big business selling thousands of dollars worth in merchandise, bringing cheap goods in from China and redistributing here. The whole “sustainable” world view is an illusion because they make it so hard to recycle useful things anymore – just sell cheap knock-off’s from China. eBay is but a shell of what it originally started out to be – a place where people could trade online to get rid of things they didn’t need and make a bit of money to get by. While both sides pass laws to take whatever money they can out of our pockets, they let the banksters responsible for this mess go totally scott-free. The reason they feel they have to extract more money in taxes from us is because they are not getting enough from the likes of MR and the rest of the 1%. Everybody is hurting and the middle class and poor pay the price. I, unfortunately, am among the latter.

    • eddie

      You only have to pay taxes on profit?

  •  It’s going to happen, the question is when…big government has the need…the need to feed on big tax dollars. Its common sense, the bigger the appetite the more that’s needed to curve the hunger pains. Mark my words…the longer the government continues to grow, the closer we get to complete taxation. Everything thing that’s bought, sold, or a service, will be taxed, and there will be no discretion to state lines…the internet will be taxed. Remember the words of a fool, “the government created the internet to make people money”

  • toodifor

    It would squeeze out little people like me.  As it is I am already barely hanging on with eBay’s high fees.  Need I say anything about PayPal’s fees?    Taxing people is not the way to make money for the government.  Put people to work and in turn they buy goods and will pay taxes on their incomes and taxes on all of the basic goods people need to get by in life. In the roaring economy of Bill Clinton, I believe the government actual had excess money.  Put people to work and leave internet sale taxes alone!

    • Tyson Evans

      If you don’t like Ebay’s fees, then why not start your own online reselling site? It’s always an option

  • ronrob60

    I agree with the other posters as to why should we have to pay taxes again when we sell used items that we already paid taxes on when we bought them.  I am also very opposed to PayPal now including the money we collect for postage being counted as “sales”.  This is very unfair to your sellers, and personally was just enough to get my earnings over the $20,000.00 mark when I was nowhere near that figure before it was added in.  Phooey!

  • CSN

    I wanted Ron Paul for President, not the two dim-wits, but Obama is more likely to impose more taxes, because he wants to spread the wealth socialist style, so he says.  As a online seller I’ve got so many areas where everyone dips into my profits, I’ve had to rethink my strategies.  This is only going to make it harder and harder.  Ebay wants us to give Free Shipping, but those costs keep going up.  Now Ebay chunks into our shipping costs as well, as they don’t want to lose anything.   Just because a person has an online presence, doesn’t mean they should be taxed to death.  Big Government wants to take your change and everything else too.  When will people start to realize that Government isn’t the answer to the problem, Government is the problem.

  • Cccrsh1385

     Very interesting  article thanks for posting it ,Although  i beleave it would have much more impact if   the names of our representatives supporting it  had been  added giveing it more credibillity as oppsed to  ”  many other GOP governors have pushed for the Internet sales tax law ”  because it appears to me that the GOP  is supporting” the states” collecting it not the federal government .  but of corse  divideing the story with links instead of  the conclusive story  may be misleading but sure saves ya time writeing it .

    • most states already collect it has nothing to do with GOP



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