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Last Updated:[29-04-2013 07:15:30 EDT] Zoom in Zoom out Back to Tradenews

Tax Beware- US mulling Taxing of Online Purchases

tradenews If you were too much into Physics in your formative years, you might have heard the famous Newtonian axiom 'For every action there is an equal and opposite reaction'.

The US Government seems to have taken a drive to 'react' to our often compulsive act of purchasing goods and services online.

Recent reports indicate that the US Senate has moved closer to passing a bill to tax purchases made over the Internet- while this move is still in its infancy, limited to the US and expected to encounter some tough time when bought in front of the US lawmakers, the prospects of such a law being conceived and put to the trial of fire should come forth as a cause of concern to all online shoppers across the World.

Our collective Governments, after all, have the infamous reputation of blindly following anything and everything that is being chaperoned by the mighty US of A, and a distinct uncertainty when it comes to the matters of the big WWW. If this law does pass muster in the US, will developing countries like China, India and Brazil be next?

Republican Steve Womack, the main sponsor of the bill understands the difficulty of flooring a bill that is immediately seen as a tax increase. In its current configuration, the bill will allow US States to 'force' online retailers, irrespective of their location, to collect sales taxes for purchases made via their portals and deposit these funds into the coffers of the State where the said online shopper lives.

Imagine if this bill will gather the required support to become a law- does the landscape ahead seem promising for all the e-commerce, B2B portals? While the trend of online shopping is gathering pace, it is still early days. The online shoppers, who were until now seduced by the idea of convenient, free shopping at their fingertips, will naturally resent this extra tax burden. The numbers in the ranks of the online shoppers' community might diminish; the bubble might burst on e-commerce and B2B portals and the whole 'tax from online purchases' idea will be rendered obsolete. It's a 'lose-lose' proposition all around. It is hoped that the influential US lawmakers will hold this point into consideration before passing their powerful judgment.

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