The author and you are confused. There is no internet specific tax being discussed in the US. The "Internet tax" bill just allows states to require companies to collect state sales tax when they sell an item to someone in the state. This is the same tax which is collected by brick and mortar stores within the state. Currently if I buy items online each year when filing my state taxes by law I must declare the value of my online purchases and pay the sales tax on them. As you can guess many people don't declare the purchases as required. The "Internet tax" bill is really a bill to change allowed tax collection methods to ensure that all currently applicable taxes are collected.
So as a hypothetical business owner in Washington who sells things online, I have to keep track of the tax laws of the other 49 states, and remit 50 checks quarterly (or maybe annually)?
> So as a hypothetical business owner in Washington who sells things online, I have to keep track of the tax laws of the other 49 states, and remit 50 checks quarterly (or maybe annually)?
Well, you have to either keep track of those laws for the states you choose to sell into, or use the free software provided by each state that has opted into the arrangement (the MFA provides an opt-in regime for states, with conditions including the provision of free software, with retailers not liable for any failure to collect and/or remit tax that is due to errors in the software.) But, yeah, you have to pay each taxing "state" (which will probably be less than 50 initially, but more than 50 in the limit case, since "states" under the MFA include the the 50 states, DC, plus other US territories and possessions.)
Or, instead of using the State-provided software and doing it yourself, you can pay a "certified software provider" to do it, and be immunized against liability for any errors that are the fault of that provider.
No, you don't. There are certain conditions which the states have to meet before they can start requiring collection. One of which is to certify one or more service providers which can be used to determine the appropriate sales tax to be collected. Currently 24 states have already certified 6 service providers including one free one. It is expected that most states will certify one or more of the existing 6 providers. If you use a certified service provider to determine the tax to be collected and the service provider makes an error you are indemnified from liability. Many e-commerce platforms already have integration with these providers. Besides determining the tax rate the providers can provide reporting regarding taxes collected and automatically file your tax returns to the states. For more info regarding the law go to http://www.marketplacefairness.org/
