Internet retail tax clears big hurdle

The Georgia Senate joined the House in calling on online retailers to start charging sales taxes on their goods.

The Senate voted 49-3 for House Bill 61, which would require online retailers who make at least $250,000 or 200 sales a year in Georgia to either collect and remit to the state sales taxes on purchases or send “tax due” notices each year to customers who spend at least $500 on their sites.

The same bill easily passed the Georgia House last year. Because the Senate made some minor changes, the House will have to vote on it again by the end of Thursday — the last day of the legislation session — before it heads to Gov. Nathan Deal’s desk for his signature.

Its passage could mean an extra $500 million to $600 million a year in sales tax collections for the state and local governments.

States across the country have been tackling the issue in recent years. But they have run up against a ruling the U.S. Supreme Court made more than 25 years ago saying governments can’t force retailers to collect and remit taxes unless they have a physical presence, such as a store, in a state.

The original ruling came before the internet sales boom. Now it is a major part of the retail landscape. For instance, online sales hit $108.2 billion this past holiday season, according to Adobe Analytics.

The Supreme Court agreed recently to reconsider the issue using a law passed by South Dakota’s Legislature for the express purpose of testing its legality. — JAMES SALZER