Georgia approves new law to collect Internet sales taxes

A new law in Georgia requires online retailers to collect sales taxes and remit them to the state. Gov. Nathan Deal is expected to sign the law approved by the state legislature, making Georgia the 10^th state to pass similar laws aimed at collecting billions of dollars in lost sales tax revenue from online retailers, according to the Associated Press (AP).

Increasingly, people shop online at Internet retailers across the country. Many online retailers already collect sales taxes, but some do not. The Georgia Internet sales tax affects retailers that do not have a physical presence in that state. If signed by the governor, the law would go into effect Oct. 1.

State auditors say the law will bring in more than $52 million in taxes for Georgia over the next three fiscal years. Proponents say the measure levels the playing field between brick-and-mortar stores and online retailers.

Georgia joins nine states that already have Internet sales tax laws, including New York, North Carolina, Rhode Island, Illinois, Arkansas, Connecticut, Vermont, California and Pennsylvania. Other states are considering similar legislation, including Kansas, Maryland, Louisiana and Mississippi.

The first such law, passed in New York in 2008, is being challenged by two of the biggest online retailers, Amazon.com and Overstock.com. Supporters of Internet tax laws say the best approach is for the federal government to pass a law that covers all states.

“We believe that more and more states will pass similar laws, as e-commerce becomes a bigger piece of the retail pie,” Deal spokesman Brian Robinson told AP. “Eventually, it will have to be taken up on the federal level.”