Online Sales Tax Battle Could Have Big Impact On Smaller RetailersOnline Sales Tax Battle Could Have Big Impact On Smaller Retailers

A new bill will let states require online retailers to collect out-of-state sales tax.The bill, (H.R.3396)from U.S. Representative William Delahunt, (D-Mass.), would allow states that have implemented the Streamlined Sales and Use Tax Agreement (SSUTA) to force online retailers to collect sales tax on out state purchases.

As InternetWeek reports, the the bill could seriously affect smaller Web retailers, but not necessarily in the ways you might think.

The Electronic Retailers Association opposes the bill on cost and compliance concerns. But the rival National Retail Federation likes it because it promises to compensate sellers for sales tax collection.

But here's the key point for bMighty readers: The bill exempts retailers that gross less than $5 million per year in remote sales.

That could be a huge competitive benefit to smaller companies, since a recent study re-comfirms the perception that price is all-important for online shoppers. Surprisingly, the richest shoppers were most likely to make price their top priority. Less suprisingly, the least price-sensitive shoppers were also the least likely to buy online.

So, what do you think? Should online retailers have to collect sales tax? Is the small company exemption fair? And what do you do if you start to grow past the $5 million/year limit?