There should not be state sales taxes assessed on Internet purchases Essay

There should not be state sales taxes assessed on Internet purchases - Essay Example However, this aspect of sales tax free goods is not available in many states or countries. It has been observed that in many states of the United States of America (US), the consumers making online purchases are required to pay the requisite sales tax amount in their respective state tax agency. This prospect of providing tax free goods or products has hampered the revenue of the government as well as the brick-and-mortar retail outlets which are providing identical goods and services by minimizing their sales volume and customer base (FindLaw, â€Å"Do You Have to Pay Sales Tax on Internet Purchases?†). It has been observed that in the US, law has been formulated as well as implemented with the intention of collecting sales taxes for the shopping which are made online. In this respect, the Marketplace Fairness Act has been formulated with the intention of collecting sales tax in relation to online transactions which are performed within states. Moreover, this Act allows an ex emption for online retailing businesses with less than US$1 million domestic sales annually (Yadron, â€Å"Lawmakers Reintroduce Online Sales Tax Legislation†). Thesis Statement The paper intends to describe the issue i.e. whether or not sales taxes should be assessed on the purchase of goods through internet. The discussion will identify the major aspects with regard to the issue. Moreover, certain supporting opinions will be provided regarding the issue with facts as well as logic. Objective Description of the Issue The sales taxes on the purchases which are made through online sources are dependent on the location of the consumer. The Supreme Court in the year 1992 made rules that online retailers who have a physical presence in the states are charged with sales taxes on most of the purchase transactions made. In this aspect, online retailers are obliged to charge sales tax for the goods which are sold to home state consumers. In case, when goods are sold to consumers in o ther states then such consumers can acquire these goods without any sales taxes (FindLaw, â€Å"Do You Have to Pay Sales Tax on Internet Purchases?†). It has been observed that there are many large websites which are performing business transactions free of sales taxes by inaugurating subsidiaries with the intention of performing only the online businesses. It is also recognized that they perform online business transactions without physical presence. The above mentioned practice of online businesses is required to be mitigated with the objective of assisting the online businesses with physical presence that are losing sales volume due to online shops which are providing goods at free sales taxes (FindLaw, â€Å"Do You Have to Pay Sales Tax on Internet Purchases?†). The consumers purchasing tax free goods from online sources are required to pay sales tax to the agency in a direct manner where sales taxes are charged in their states. In case, where the consumers pay sal es tax directly to the sales tax agency are termed as ‘use’ tax. The only difference between sales tax and use tax is regarding the paid tax amount. In terms of sales tax, the tax amount is directly paid by online retailers to the sales tax agency. While, in case of use tax, the tax amount is paid by consumers themselves. Moreover, collecting use tax for small purchases tends to