Lawmakers on the federal level have finally developed a basic plan to allow states to tax internet sales. We discussed this issue in a previous post when an internet sales tax in Georgia was set to take effect. At that time, Congress had not taken action on this issue to insure consistency among the states. Supporters of the plan recently released by the House Judiciary Committee would set forth seven principles for state internet sales tax laws, making them consistent in nature around the country. This will make life easier for online businesses which likely ship to many different states. 

Collecting an internet sales tax will raise an estimated $11 billion in revenue for states. 

There have been some concerns about the impact a sale tax could have on smaller online retailers, but there are various proposals to help mitigate that harm, including an exemption for companies that sell less than $1 million in products per year or an exemption for companies with less than 50 employees. These ideas are still in the proposal stage, so it is not clear which which wind up in the final bill that is passed by Congress and signed by the President.

When United States tax law changes, it is important for individuals and businesses to understand what has changed and how to comply with it. In this case, the change will impact businesses that operate exclusively in the online marketplace, which is a growing segment of retail sales.

If an online business does not pay close attention to relevant taxes, then they could face a dispute with the IRS or even an audit.

Source: Reuters, "U.S. internet sales tax bill to follow seven principles," Lisa Lambert, Sept. 17, 2013.