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Tax on internet sales is coming…..why should you care? Hmmm, do you have a website?
As AAD recently pointed out in the article of April 11, 71% of collectors have bought a piece of art (or more than one!) without having seen it in person first.


And 25% of collectors have spent L50,000 – or more – on a single piece of artwork .
And of course, this is free of tax, if you live in the US, in a different state than the one you purchased from. Shipping no (although many galleries will pay that), tax yes.

All of this is about to change. And the first vote is on Monday.

To start with, the new law, called “The Marketplace Fairness Act”, if voted in, would allow 45 states, and the District of Columbia, to charge sales taxes on purchases made by the large on-line retailers (think Amazon, which is already collecting tax in states where it has warehouses). The retailers must have sales of over $1million in states where they don’t have physical operations. The estimates of tax to be collected –$12 billion (and estimates from other sources are almost double that). In the US alone, the Commerce Department estimates that there was more than $225 billion (yes, billion) in internet sales last year. Whew – I needed a glass of my favorite beverage when I read that (and it’s only 10 in the morning!)

Still don’t care?

Are you an artist with your work on Saatchi? Ever buy things at internet auctions?

Do you have a website – a very successful website?

The first law will set the limit at $1million, but you know, states are hungry for tax revenue, and these are frisky times. So, I would say if this law is passed, it is probably a sure thing that the bar will, sooner, not later, be lowered.

But there is already grumbling – and they haven’t even had the vote yet! According to CBS, a recent poll from Quinnipiac University shows that the public isn't thrilled about the new, long-debated, tax collecting scheme: 56 % said they think items purchased on the internet should not be subject to state sales taxes, while just 37 % said they should be. But almost nobody has actually complained to their local lawmakers, making this pretty much a sure thing.

How would it actually work? Would you have to re-design your website? Well yes – and no. The states involved would provide free software to be embedded in the website, which would do all the calculations (Ebay, for example, already does this – but only within the state in question). And they would have to provide an office to collect revenue (the easy part).

The good news? CNN reports that in a survey done by AlixPartners, 30% of online shoppers said they would shop more at brick-and-mortar retailers (as in, local art and antiques dealers). And that’s worth a toast!