Internet Sales Tax

[alc]

50. it's only good if it's a federal tax

I've run sites that sell products on the internet as a one-man company. It's not too bad to collect and pay sales tax for my state. No way I could do it for 50 states. So I'd use some service to manage it which would certainly take away another couple % of my revenue (not profit). A single federal tax would be about as much effort as my single state obligations.

Big companies like Amazon love the idea of making me pay every state directly. They can manage it for a fraction of a % of their sales and beat me and even bigger competition.

And don't think it's going to stop at states. My city would love to collect their % of everything I buy online and what's the different between my state getting their % and my city getting theirs? So any online retailer will be dealing with 1000s of tax collectors. Need to keep up with rate changes, back to school tax-amnesty days (if they want to), penalties when the check doesn't arrive or gets lost by the city, etc. It's impossible for a one-man business. This must be single rate paid to a single entity (e.g. the feds) or the big players will be the only ones left who can afford to sell online because a tax processing service (e.g. paypal) will be taking 2-3% of all sales for handling taxes along with their 2-3% for payment processing.