Internet Tax Man Cometh

As the Obama's party in Rio and their tidy little war in Libya starts in earnest, Democrats in blue states are looking for new cash cows to keep their spending parties going.

Tax-free shopping is under threat for many online shoppers as blue states like California, Illinois, New York, Arkansas, Rhode Island, Vermont, Colorado, Texas, and North Carolina lead the charge to force Internet retailers to start collecting sales taxes from their residents.

But how to do it without violating a 1992 U.S. Supreme Court ruling that prohibits a state from forcing businesses to collect sales taxes unless the business has a physical presence, such as a store, in that state.  Taxes are like the golden honey syrup to a Democrat, and these states have crafty honey stealing bears ready to pretend that an "affiliate", "shipping center", or even an "advertiser" qualifies as a physical presence.

Online retailers such as Amazon.com and Overstock.com Inc. disagree with the states' actions, and they're fighting back, with mixed results.

The day of avoiding tax in an online purchase may soon be coming to an end - and with it, an end to the modern virtual store front.

Related:
Hollywood Celebs Are in Big Trouble With the Tax Man.