Internet sales now equate to 3 % of all retail sales in the US, or about $79 billion, according to Forrester Research. Much of this revenue is untaxed.
The complexity of the state and federal tax systems has meant that an internet company based in one state, taxing a customer from another state, has so far not been forced to levy a retail tax on the price of the goods bought.
However, a recent case established that if the company had a physical presence in the state then that company would have to levy retail tax on customers from that state purchasing on-line.
The sponsor of the new Bill that effects the change in California, Senator Dede Alpert, said: “These taxes have always been owed. Every time someone in California buys from an internet company, they owe us tax and are supposed to pay."
He added, "I want to emphasize that this is not a new tax. This is a better collection of an existing tax."
According to the Washington Post, 39 states and the District of Columbia are already planning to streamline their tax systems to allow for on-line sales tax collection.