Internet sales tax push gains currency

The days of the Internet as a tax-free shopping zone may be numbered.

Sen Dick Durbin (D-II) is expected to step into the escalating Internet sales tax battle as soon as this week with a bill that would allow the 44 states — plus Washington, (DC) — that collect sales taxes to require out-of-state online retailers to pay up. Durbin’s Main Street Fairness Act is similar to some previous congressional efforts to weigh in on whether states can force online businesses to collect sales taxes on items sold to state residents. But while those efforts failed, this year may be different. Faced with state budget shortfalls, some large states like Texas, California and Illinois are looking to online retailers for additional tax revenues. As a result, large e-tailers — such as Amazon.com — have threatened to cut off affiliates who sell in those states rather than start collecting taxes.