Congress Going After Online Shoppers

The government's insatiable thirst for tax revenue is about to hit online shoppers, who've largely managed to escape onerous state taxes by shopping at sites such as Amazon.com. So if you've been wondering what to do with that $13-a-week windfall from King Obama, just forward it to your state government.

The days of buying online to avoid paying sales taxes may soon be over.

A bill is expected to be introduced to Congress this week that would force retailers like eBay and Amazon.com to start collecting sales taxes on behalf of states from people who shop online or through mail order.

It's not a new effort: Attempts to close the online tax "loophole" have been going on for at least a decade.

But supporters of the bill think Congress may finally give in to their demands because of their own pressure to lend support to financially battered state governments.

"This would be fiscal relief for the states that wouldn't require any money from the federal government," said Neal Osten, a senior policy analyst with the National Conference of State Legislatures, which is drafting the bill.

Osten pointed to a recent study that said state sales tax collections fell to their lowest levels in 50 years at the end of 2008.

The study by the Rockefeller Institute, which is the public-policy research arm of the State University of New York, said that fourth-quarter 2008 sales taxes dropped by 6.1 percent, and that preliminary figures for the first three months of 2009 suggest even steeper declines.

In case you're wondering, and I know you are, this isn't just another Democrat tax scheme. It's bi-partisan confiscation of your money.

Osten said the new bill, which is expected to be introduced by Sen. Mike Enzi, (R-WYO) and Rep. Bill Delahunt, (D-MA), is being drafted to make it easier for retailers by requiring states to inform retailers when there's a change in the tax code, such as a sales tax holiday.

Under the current rules, sales taxes often slip through the cracks. Shoppers living in Vermont, for example, aren't required to pay sales tax at the time of purchase when buying stuff on Amazon.com.

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