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Online Sales Tax Breaks May End

Ryan McVay/Photodisc/Thinkstock(NEW YORK) -- Consumers in many states may soon have to say goodbye to tax-free online shopping.

By a large bipartisan majority, the Senate voted for an amendment to the budget bill, which would require all retailers to collect and report sales tax. The House has yet to vote on this.

The Marketplace Fairness Act covers brick-and-mortar stores and online sites. “It’s not a tax,” says David Korn of the National Retail Federation, who supports the amendment. “The era of digital commerce has created challenges for state sales tax laws.”

Even Amazon backs the proposal, despite its long opposition to collecting sales taxes. One reason for Amazon’s change of heart is its decision to build more regional distribution centers to speed up deliveries of its goods.

Brick-and-mortar retailers have long argued that they are at a disadvantage, because they have to collect sales taxes while online competitors are exempt. Supporters of the Marketplace Fairness Act say it would level the playing field.

Copyright 2013 ABC News Radio

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