Donald Trump pledges support for internet retail sales tax

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Donald Trump

US President Donald Trump has reportedly backed calls for an overhaul of legislation on taxing internet sales, in a move which could have ramifications for online retail institutions.

Steve Mnuchin, the US treasury secretary, said Trump “does feel strongly” about introducing a national tax on internet sales.

Under current US legislation, retailers only pay sales tax in states where they have a significant physical presence, which is estimated to have lost the government around $13 billion (£9.2 billion) in sales tax last year.

Calls for a tax on online sales have been growing in the US over the past few years, coming to a head earlier this year in South Dakota, which is calling for a 1992 Supreme Court ruling to be overturned based on the argument that tax rules are obsolete in modern society.

Here in the UK similar pressure has also been building, with the government citing a growing disparity between tax paid by online giants like Amazon and retailers with a physical presence.

Late last year, retail experts called on the government to reform UK tax laws, after it was revealed that Amazon saw a significant tax cut while physical retailers were going under at increasing rates due to tax bills.

“If we want to maintain a variety of forms of competitive retail enterprise, from small stores to large big box and department stores serving villages, towns and big cities, we need to ensure that property and company taxes do not consistently penalise physical shops in favour of e-commerce,” Centre for Retail Research’s Professor Joshua Bamfield said.

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