Why Online Shoppers Could Soon Pay More

Morning Business Memo:

The Senate could vote as soon as today on a bill to tax Internet shopping. The legislation would give states the power to require online retailers to collect state and local taxes, just as local stores do.

This would mean an end to tax-free online shopping for millions of consumers. Surprisingly perhaps, most Senate Republicans support the measure, which has been championed by the National Retail Federation. Amazon, the number-one online retailer, has abandoned its opposition.

Amazon recently expanded local warehouses and in many states is already required to collect state taxes. Under the bill, taxes would be sent to the states where a shopper lives. The bill Wednesday passed a test vote in the Senate, 74 to 23, with 27 Republicans voting in favor. "This is a matter of equity and fairness," South Dakota Gov. Dennis Daugaard, a Republican, said. "The same people who are selling the same products should be paying the same taxes."

Under existing law, states can only require stores to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are essentially tax-free, giving Internet retailers an advantage over brick-and-mortar stores.

GE Capital is ending financing for purchases at gun stores. The decision follows a review after the Newtown, Conn., school massacre. General Electric is rethinking its relationship to the gun industry. The Wall Street Journal says "GE is at least the second big financial firm to retreat from the gun business following the school shootings." The new policy affects only firearms retailers and not general-merchandise stores, such as Walmart.

Changing your travel plans is getting really expensive at US Airways and United. The fee to modify or cancel a ticket in advance on a domestic flight has been raised to $200, an increase of $50. Changing a ticket for an international flight goes up to as much as $300. Fees for altering tickets and checking baggage have become a major source of revenue for the biggest airlines, although Southwest doesn't charge to change a ticket

Britain dodged a recession after official figures showed the economy grew in the first quarter of this year. The Office for National Statistics said the economy grew by 0.3 percent, compared with the previous three-month period. Although slight, the growth was stronger than most economists had expected. The British government's policy with deep spending cuts has many critics.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc

Join the Discussion
blog comments powered by Disqus
You Might Also Like...