New US laws could change the eCommerce landscape

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eCommerce Game Changer??

As reported by BDO Australia, the US government is attempting to bring in laws that would gives each of the states in the USA the power to collect sales taxes from out-of-state retailers.  Currently, the US states only collect sales tax from operations within each state’s borders.

This would apply for interstate transactions, as well as international transactions from Australian merchants selling to customers in the USA.  With over 50 different tax regimes, merchants would be required to know the address of each customer at the time the customer was making a purchase, and levy the correct amount of tax.

One point to note is that this proposed American bill would only apply to online retailers that have a turnover of more than $1 million in the US.

Whilst this scheme is designed to protect local retailers, it would clearly be cumbersome to administer and highly problematic for merchants.

It may not change the game too much for Aussie merchants, but it would sure make eCommerce  more complicated for some business operators in the USA.

If this law does get passed in the USA, it could stimulate action from the Australian government to adjust Australian GST laws.

By Richard Keeves

 


July 5, 2014

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