With changes in the tax law taking effect this month, Georgia intends to begin treating some online retailers the same way it treats those with stores here: by collecting sales tax.
That will mean that Georgians who avoid paying sales tax by buying online may now find that harder to do, officials said.
The amount of money people spend online continues to grow steadily, The Atlanta Journal-Constitution reported (http://bit.ly/QPCdz3).
A 2009 study projected that Georgia would lose as much as $455.5 million in uncollected sales tax from online purchases in 2012.
Collecting the tax from some web sellers that were not previously required to charge sales tax will add an estimated $18 million a year to the state's coffers, officials predict.
Stores are only required to charge sales tax for online purchases in a state if they have a physical presence in that state: a Macy's store at Lenox Square, for example, or a call center in Alpharetta.
Georgia has expanded its definition of the "physical presence" of a business in an effort to get more online stores to collect sales tax from their customers.
Beginning last week, that included companies that use warehouses or offices in Georgia, whether they own them or not. At the end of the year, it will also include companies that have click-through ads on Georgia-based websites, known as affiliate relationships.
"It attempts to level that playing field a bit," Ken Heaghney, economist for the state, told the Journal-Constitution. "We want them (online and local retailers) to compete on the merits of service and products and pricing."
It's also an issue of fairness for stores in local strip centers and shopping malls, which pay property taxes and contribute to the fabric of a community. A desire to put them on equal footing with online competitors has galvanized support to extend sales tax collections in many states.
"It means a great deal to small business," said Rick McAllister, president and CEO of the Georgia Retail Association. "It's tough to start out the day at a mom-and-pop retail store when you're at an 8 percent disadvantage before you open the door."
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