Bucks Blog: Online Shopping, With Sales Tax Added

Isaac Brekken for The New York Times A shopper compares prices online.

Attention, all you online shoppers out there: your sales-tax-free party may soon be over.

The Senate is set to vote on the “Marketplace Fairness Act,” legislation that would help states force online retailers to collect sales taxes for Internet purchases.

The measure, supported by some revenue-hungry states, as well as brick and mortar merchants who say it would eliminate an unfair advantage for online sellers, is expected to be voted on by the Senate this week. It must then, of course, be considered by the House of Representatives.

If the proposal becomes law, a perk of online shopping would go away and shoppers would pay the sales taxes to the online retailer at the time of purchase — just as they do now in physical stores. Some of the biggest online retailers, like Amazon.com, have already started collecting them.

“The free ride is almost over,” Edgar Dworsky, publisher of Consumer World, said in an e-mail. “Shoppers will now have to figure in sales tax when they are deciding whether it is better to buy a particular item online or in a brick-and-mortar store.”

Right now, Internet sellers must collect state sales taxes on online sales only if the seller has a “physical presence” — like a store, or distribution center — in the state. But consumers are still technically subject to the tax in many states — a fact that may come as a surprise to many online shoppers. It’s often called a “use” tax, because it is levied on an item you bought out of state but you “use” in your home state.

In Florida, for instance, the state Department of Revenue’s Web site says online purchases are subject to the state’s 6 percent sales tax, even if the seller doesn’t collect it at time of purchase. Florida consumers are supposed to fill out an “out-of-state purchase return,” also known as a Form DR-15MO, and mail the payment directly to the state.

But few consumers are even aware of such requirements, said Stephen Schatz, a spokesman for the National Retail Federation, which represents large retailers and supports the legislation. The proposed law, he said, “shifts compliance from consumers, who aren’t complying or are complying minimally, to the retailer.”

He added that the law would require states to streamline their sales tax processes and take other steps to ease the burden on retailers.

It doesn’t seem to me that the law is lifting much of a burden from consumers, though. It just seems that we’ll be paying more when buying some things online. Sigh.

Of course, there’s still the attraction of shopping online in your pajamas and then having your purchase delivered to your door, often with “free shipping” thrown into the bargain. For that reason, I suspect I’ll still shop online as much as I did before, if the measure becomes law. (A report from Forrester Research says consumer behavior is unlikely to change much because of the addition of online sales taxes.)

Jack Gillis, a spokesman for the Consumer Federation of America, agreed. “People shop on the Internet for so many more reasons than to avoid taxes,” he said in an e-mail, so taxing online purchases will probably have little effect on purchase behavior. Online sellers might even offer better shipping deals or lower prices to lessen the impact, he said.

What do you think? Would broader collection of sales taxes make you shop online less?

Bucks Blog: When Free Stuff Leads You Astray

The main menu on Waze, a navigation and traffic app.

We all like freebies. But sometimes, free stuff can lure you into making choices that may not really be best. I learned that lesson anew last week, while on a road trip that took me through rural parts of Arkansas and Missouri.

A quick comparison of flying time versus driving time had led me to choose the automobile for this outing. That meant I’d be behind the wheel for about six hours, but at least part of the route promised to include scenic foliage, and the weather looked good.

Since I was driving alone, I decided to use a voice-guided G.P.S. system, to avoid having to check maps while dodging road kill. I had recently acquired an iPhone (not the most recent version, infamous for its map snafus). So I did a quick online search to see what navigation app might work best. My cellular provider, Verizon, offered one, for an extra $5 a month. That might not sound so pricey, but I think my cellphone bill is already outrageous, so I balked and kept searching.

I quickly — too quickly, it turns out — settled on a free app called Waze that got high marks from various reviewers (including one for The New York Times). The app’s main benefit is that it pools information from its users and sends back real-time information about traffic conditions, making it particularly popular with urban commuters seeking to avoid freeway snarls. I perhaps should have realized that an app aimed at commuters traveling familiar routes might not be the best fit for my purposes. But I figured it could still give me basic directions — and did I mention that it was free?

I ran a short test of the app the day before my trip, as I was running an errand, and it seemed to work. So I was hopeful when, in my driveway in the predawn darkness, I fired up the app and typed in the address of my destination. But at the end of my street, it told me to turn left. The correct option was to turn right. O.K., I thought, it will recalculate my route when it “sees” where I’m going. Ten miles later, it was still haranguing me to turn left — as if I were driving in some alternate universe, in which Missouri is west of Arkansas.

Michal Habdank-Kolaczkowski, communications director for Waze, explained that the app, which was introduced in the United States in 2009, begins with maps from the United States Census Bureau’s Tiger system, but that they are tweaked and updated constantly by Waze users. That means that in areas like Los Angeles, where the app claims 10 percent of drivers as users, the maps get constant feedback from users, who help keep the app updated. In flyover country, however, there are fewer users — at least for now — so the maps are not always as accurate. (That’s too bad. I wish the app could have warned me about those early-morning rural school buses, stopping every mile or two to pick up farm children.)

He encouraged me to correct any errors in the map, which is how Waze users benefit the system and others. But that is more of a commitment than I want to make for a one-time trip. I guess Waze isn’t for me right now. Except for intermittent reporting trips, I work at home, so the commuting I do usually is from my desk to the coffeepot.

After realizing that Waze was not going to get me where I needed to go, I debated whether to forge ahead without electronic assistance. The directions on my print map looked simple enough, but I had an appointment to keep and didn’t want any delays. So I pulled over and hunted down a new app on my phone. Not wanting to waste time, I opted for the Verizon app, VZ Navigator. It would give 30 days free on trial, it turned out, and it got me to my destination without a hitch. I wish I could say the same for the radio options on my route. I didn’t have satellite radio or an iPod jack, so I had to choose between classic rock (Pat Benatar is as annoying now as she was then) or Glenn Beck (news flash: stockpiling nonperishable food is the new version of investing in gold).

The trip back home was almost as smooth, after an initial problem. When I tried to retrace my route in reverse, the VZ Navigator kept telling me to “take the next legal U-turn” for the first 20 minutes or so. It finally gave up and reset itself — just before I was about to turn it off and sing along to some vintage Journey.

Have you had any disappointing experiences with free stuff? What happened?