Study: Internet Sales Tax Software will be Costly to Implement

Software to help small businesses comply with an U.S. Internet sales tax would cost many businesses tens of thousands of dollars to roll out and nearly as much to maintain each year, according to a study released by opponents of the proposed tax.

As several U.S. lawmakers and retail groups renew their efforts to get Congress to approve an Internet sales tax, opponents countered Wednesday with a study saying sales tax collection software would cost medium-sized Web-based sellers $80,000 to $290,000 to set up and another $57,500 to $260,000 a year in fees, auditing expense and other costs.

Even though some Internet sales tax bills would require states to make tax collection software available free to businesses, many Internet sellers would still have to pay those set-up and maintenance costs, according to the study commissioned by True Simplification of Taxation (TruST), a group opposed to an Internet sales tax. It will be difficult for Internet businesses to get software to work with up to 46 states that now collect sales taxes, wrote study authors Larry Kavanagh and Al Bessin.

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