Are You Ready for a Federal Online Shopping Tax?

Willie Sutton famously said he robbed banks "because that's where the money is." In a similar vein, cash-strapped state and federal lawmakers are looking to raise funds wherever they can, which invariably leads them to online shopping, one of the fastest growing industries in an otherwise tepid economy.

But now, New York and several other states are looking to get their cut of the e-commerce pie by collecting sales tax on all internet purchases and transactions.

Amazon, like my co-host Jeff Macke, thinks this is not such a great idea. As a result, the Seattle company run by billionaire Jeff Bezos has hired a powerful lawyer to make its case court.

But like most issues, especially those emanating from Washington or the capitals of large states, the matter is complicated.

According to the latest Commerce Department data, internet sales increased by 18.4% in the second quarter, while traditional retail sales rose by just 4.7%. Even so, on-line shopping still accounts for only about 5% of total retail sales, or $65 billion out of $1.12 trillion. Read more >>