As online shopping becomes more popular, the Silver State is missing out on millions in tax dollars. But Senate Bill 392 would require internet companies to collect sales tax for online purchases. Senator Aaron Ford says as internet commerce grows in popularity, a solution is even more necessary.
"Over $250 billion worth of activity has taken place over the last few years and it's anticipated that in the next decade or so, that's going to raise to about $411 billion of activity throughout our nation," Ford, (D) Las Vegas said.
But very few of those companies collect sales tax. That means less money going into our state's budget.
"I think we can all agree that internet sales tax is one of the biggest gaps or loopholes," Ford said. "To facilitate an appropriate approach to that issue would be able to garner more funds for education."
If passed, websites would collect the sales tax, just like brick-and-mortar stores do. Senator Ben Kieckhefer says this bill has bipartisan support, and agree this would help local companies.
"Clearly, there's a disadvantage for our local retailers, the brick and mortar guys who have made an investment in our community, when people can go and shop online and pay 8% less," Kieckhefer, (R) Reno said.
Some online companies, like Amazon, have facilities in the Silver State, and have agreed to collect sales tax from Nevadans. Kieckhefer says it's time other internet companies do the same.
"The Retailers Association is in support," Kieckhefer said. "There are some internet retailers that already collect taxes that are remitted to the state. So they would like to see it applied to everyone."
While many assume internet purchases are tax free, that's not the case. It is the consumer's responsibility to pay the sales tax.
"As you might imagine, it's very difficult to enforce that," Ford said. "So, we have to find another way to make that happen."
"It's a burdensome process for an individual shopper to walk down to the Department of Taxation and file a use tax, on a book that they purchased online," Kieckhefer said. "But, legally, they're supposed to and this would relieve some of that."
Kieckhefer says he expects this bill to pass the Senate. But he also hopes Congress passes the Marketplace Fairness Act, that would bring a national solution to the issue.