ABC NEWS: The End of Tax-Free Online Shopping?

Source: ABC News

Tax-free shopping for online goods may soon become a thing of the past. A bill in Congress would make collection of sales tax a standard practice on the web, something traditional brick and mortar retailers argue is a matter of fairness. Stores do all the work, says a top executive at the National Retail Federation, and then online competitors steal the sale because they don’t have to charge state and local sales taxes. Now there’s growing bipartisan support in Congress for legislation to require big online retailers to collect those taxes no matter where you shop.

The economy remains stuck half-way between recession and solid growth. Friday’s employment report from the Labor Department was the fourth straight month of disappointing news on jobs. Overseas events are only adding to worries about the US economy. But not everyone’s got the gloomies. While Phil Orlando, chief equity market strategist at Federated Investors, calls Friday’s report “terrible,” he does say consumer spending and the jobs market may pick up later this summer.

“We do expect economic trends to improve generally as we get to the back end of the current quarter.” Orlando tells me one reason is the fall in gas prices: “you’ve got energy prices which peaked in March down about 30 percent or so.” Many people with good credit have been refinancing their mortgages. This gives them more money to spend. “Those two factors at a minimum are going to start to improve economic activity domestically,” says Orlando.

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