Internet sales tax: What it means to the consumer

TALLAHASSEE, FL (WFLX) - Many online retailers do not collect an Internet sales tax on items bought in the state of Florida, but if the Marketplace Fairness Act passes, buyers could see a 6 percent increase on their purchases. 

The Senate passed a bill that would require online retailers to collect sales tax where they ship orders.

Supporters of the bill, like and Target feel this tax would put them on an even playing field. 

According to USA Today, Stephen Sadove, the chairman of the board of the National Retail Federation, said, "Retailers compete for customers on many differ levels, distribution channels and fronts, including service and selection, but they can't compete on sales tax."

He said this bill would work for retailers of all shapes, sizes and channels.

Local stores have trouble competing with online retailers who only have to charge a sales tax to customers in states where they have a physical presence.

It's Web retailers that sell more than a $1 million a year, the threshold set in the law for sellers to collect the taxes, to out of state buyers that will feel the biggest pinch.

Companies said it's too burdensome to collect taxes for multiple states, even with state provided software called for in the bill.  Some companies said they will need more employees just to deal with sales tax.

Non-supporters have said it would impact sellers who do more than a million in out of state annually. Companies like, where small retailers conduct their businesses, is opposing the legislation.

eBay reps said small businesses with less than $10 million in sales or fewer than 50 employees should be protected from new burdens that hurt their potential to compete and grow.

The Department of Commerce said there were more than $220 billion in online sales last year, and that states lost out on a combined $23 billion in tax revenue.

Florida lost out on more than $800 million in uncollected taxes.

Consumers are supposed to pay a sales tax when they file their tax returns, but most people either forget or ignore the requirements, and the government said it's hard to enforce. The bill would regulate that.

If passed, this tax could go into effect as early as October.

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