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Tuesday, October 9, 2012

Georgia consumers collectively sigh as online sales tax goes into effect

As part of a tax-reform package that passed last March, the state of Georgia is starting to impose an eight-percent sales tax on online purchases this month.

For years, consumers could shop on the Internet without having to pay the equivalent in taxes charged at brick-and-mortar retailers. According to 11Alive, Georgia now becomes the 10th state to revise its tax codes for online purchases, meaning that Amazon, Overstock, and other similar websites will no longer be exempt from collecting sales tax.

According to the AJC, a 2009 University of Tennessee report had projected that Georgia could lose "as much as $455.5 million in uncollected sales tax from online purchases in 2012." With the tax code revisions in place, the state now estimates that they will earn an additional $18 million per year.

In addition, tax requirements on retailers also help to create an increasingly level playing field for small local businesses. The newly christened reforms do, however, put a burden on shoppers — charging a "use tax" that will need to be filed along with income taxes whenever an Internet retailer doesn't collect it themselves.

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