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States Fighting for Online Sales Tax

By: Megan Hunter
Updated: October 18, 2012
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Some states are fighting to tax online purchases--Alabama included.

"It gives these remote sellers an advantage," said Mark Culver, the chairman of the Alabama streamlined sales tax commission. "Say you are in Houston County or Dothan, you pay a 9% sales tax. If you pay for something in New Jersey, it gives them a 9% advantage."

That's why states like Alabama are fighting to tax online sales.

Culver said no online taxes means billions of dollars in revenue lost to local and county governments.

In fact, the National Conference of State Legislatures estimated that states missed out on over $8.6 billion in revenues by failing to collect sales tax for online purchases.

"That's not good for our local businesses, and not good for the governmental tax base for Alabama, Dothan, and Houston County. We just want to be fair and if there is tax due, then tax is paid," said Culver.

So the states are fighting back, urging Congress to pass a Main Street Fairness Act.

"The belief is that if we can get Congress to pass something, and our legislature can do what they need to do to get on board with that, it'll help soften some of the budget crisis that the state currently has," said Culver.

Culver said if Congress fails to pass the Main Street Fairness Act, cities could miss out on millions of dollars in tax revenue this holiday shopping season.



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