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States Close in on Internet Tax Collection
Internet News ^ | July 8, 2005 | Roy Mark

Posted on 07/08/2005 11:49:57 PM PDT by nickcarraway

The Internet sales tax issue may have reached the tipping point when 18 state tax collectors agreed upon an interstate set of sales tax rules. The tipping point, however, is still a long way from reality.

Meeting in Chicago last week, the Streamlined Sales Tax Project (SSTP) took its most significant step to date to implement the collection of sales taxes on online purchases, a potential $20 billion-a-year bonanza for cash-strapped states.

To bring those funds closer to state and local coffers, the SSTP officially admitted 18 states as members of the Streamlined Sales and Use Tax Agreement's (SSUTA) governing board. The interstate alliance plans to offer retailers free software to voluntarily collect sales taxes by October.

Under the SSUTA compact, the simplified sales tax system cannot take effect until at least 10 states representing 20 percent of the total population are in compliance with the agreement. The 18 states admitted to the SSUTA board represent 25.3 percent of the population of states.

Despite the landmark agreement, though, no one is under any legal obligation to collect online sales taxes until Congress approves the deal.

States have struggled for years to force catalogue and online retailers to collect sales taxes on purchases. In 1992, the U.S. Supreme Court said states could only require sellers that have a physical presence or "nexus" in the same state as the consumer to collect the so-called use taxes.

The court also ruled that buyers owe the tax, but the current patchwork of more than 7,500 taxing jurisdictions across the country is too complex and burdensome for online retailers to charge and collect sales taxes. To collect the taxes, the court ruled, states would need to first simplify the existing system.

To overturn the Supreme Court's decision, Congress has to certify the states have streamlined their sales taxes.

Led by the National Governors Association (NGA), states and local governments began the process five years ago of simplifying their sales taxes through the SSTP.

Two years ago, Senators Michael Enzi (R-Wyo.) and Brian Dorgan (D-N.D.) introduced a bill to require out-of-state retailers, including Internet businesses, to charge and collect sales taxes on transactions. The legislation had the effect of sanctioning the SSTP efforts.

"E-commerce has caused a significant change in consumer buying trends. More and more people are making purchases through remote businesses, such as online, catalog and phone-order," Enzi said when he introduced the bill. "This change has reduced sales tax revenues to states, cities and towns that rely on this form of revenue to provide essential community services such as education, law enforcement, and fire fighting."

Last week's Chicago accord brings congressional action back into focus, although no legislation has been introduced.


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Extended News; Miscellaneous; News/Current Events; Politics/Elections; US: District of Columbia
KEYWORDS: cary; internet; internettaxes; nga; taxes
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To: CyberAnt
Well .. except for necessities .. we could stage a protest - and not buy anything over the internet - when their taxes don't materialize - they might change their minds .. LOL!

You funny guy!

If serious, seek help immediately.... ; )

21 posted on 07/09/2005 1:46:34 AM PDT by EGPWS
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To: Myrddin
The states would be saddled with collecting a detailed account of sales tax paid by every taxpayer in the jurisdication. A truly gross thought.

A dream come true for the "anti free enterprise" state politician.

22 posted on 07/09/2005 1:52:16 AM PDT by EGPWS
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To: nickcarraway
Wouldn't you know it? The government has to stick their hands in your pocket on everything, EVERYTHING!!! Pretty soon Americans are going to be paying as much in taxes as the Britains and Canadians do.

You can't even own land anymore in most states. If you pay property taxes, you are renting your land from the government.

(Rant switch now turned off)

23 posted on 07/09/2005 1:58:29 AM PDT by 2nd_Amendment_Defender ("It is when people forget God that tyrants forge their chains." -- Patrick Henry)
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To: nickcarraway

Every story I've read in the last few years regarding possible internet taxation always has the same implied message that says "Relax people, it's just an idea. It won't be implimented...". Funny how we are lied to right up to the fall of the ax blade.


24 posted on 07/09/2005 2:12:02 AM PDT by SpaceBar
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To: SpaceBar

The reason I like to buy on-line is convenience. But you have to pay shipping charges for your purchases. But you don't have to pay taxes so that makes up somewhat for the shipping charges. It comes out almost a wash. But if they slap sales taxes on top of shipping charges, then it is no longer cost effective to purchase on-line. I probably wouldn't stop on-line purchases totally, but I sure would get off my duff and head to the store rather than pay both shipping and sales taxes on-line. This will really hurt on-line business, and will cause inconvenience to those who would otherwise buy on-line. Bad idea, bad idea indeed.


25 posted on 07/09/2005 2:27:00 AM PDT by flaglady47
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To: SpaceBar
Every story I've read in the last few years regarding possible internet taxation always has the same implied message that says "Relax people, it's just an idea. It won't be implimented...". Funny how we are lied to right up to the fall of the ax blade.

Sort of like, "relax little frog, it's just a nice warm bath we're drawing for your comfort"!

26 posted on 07/09/2005 3:21:15 AM PDT by 6SJ7
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To: CyberAnt
Well .. except for necessities .. we could stage a protest - and not buy anything over the internet - when their taxes don't materialize - they might change their minds .. LOL!

I never make internet purchases anyway. I go to the internet and find what I want or need, out of state, and call them on their 800 number. My Visa number never get on the internet, and there is no tax on interstate purchases by phone.

Another benefit of doing it this way is, I know to whom I've given my CC number too. If there are any fraudulent charges, I know where to start.
27 posted on 07/09/2005 4:41:33 AM PDT by chainsaw
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To: nickcarraway

It's not fair that people who buy goods on the net don't pay taxes.

People should pay taxes on internet purchases, homes, cars, cats, dogs, lawns, the dirt you walk on and the air you breathe.

People need to pay taxes so the fellow on state welfare can drink beer on your dollar.

And the bureaucrat who preys on you and harasses you needs tax dollars, too, so he can retire on disability at age 35 and collect $100,000 annually on your tax dollar.

Paying taxes on everything is one of the government's sacraments and everyone needs to partake.

Taxes are good for you as it removes dollars from your pocket that you might spend on an ice cream cones for your kids. You don't want your kids fat, do you? See? Taxes are healthy for your family's health.

So, tax, tax, tax, tax. It's healthy, it supports the common good and you can walk down the street and point to the welfare drunk draped over the porch railing and proudly say, "I contributed to the common good and bought that fellow a beer."


28 posted on 07/09/2005 5:37:14 AM PDT by sergeantdave (Marxism has not only failed to promote human freedom, it has failed to produce food)
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To: John Filson
"This change has reduced sales tax revenues to states, cities and towns that rely on this form of revenue to provide essential community services such as education, law enforcement, and fire fighting."

Well, I guess there is no need for property taxes anymore...

29 posted on 07/09/2005 6:04:04 AM PDT by Sir Francis Dashwood (LET'S ROLL!)
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To: Myrddin

For me, it's not that local retailers don't have the merchandise. The reasons i buy online are:

1.Easier price comparisons mean its often cheaper to buy online.
2.No hassle from salespeople or with uninformed salespeople.
3.The lack of sales tax generally pays for delivery charges if any.
4.CONVENIENCE. I don't have to drive to the store, find a parking place and fight the weather or crowds.


30 posted on 07/09/2005 6:34:25 AM PDT by wildbill
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To: konaice
Article 1, Section 9: ... No tax or duty shall be laid on Articles Exported from any state.
Section 10: No state shall without consent of congress lay any imposts or duties on imports or exports.
Not that anything in the constitution is safe to rely on these days

Those sections aren't about interstate sales; they're about imports/exports to & from foreign countries.

The Constitution does not forbid interstate sales taxes. All that's required is Congress's permission.

31 posted on 07/09/2005 7:21:34 AM PDT by Sandy
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To: Sir Francis Dashwood
Well, I guess there is no need for property taxes anymore...

Or seen from a different perspective, legislators are rubbing their hands together in greedy anticipation of additional funds which they can further misuse, misappropriate, lose, waste, and otherwise abuse.

32 posted on 07/09/2005 7:23:36 AM PDT by John Filson
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To: nickcarraway

"Meeting in Chicago last week, the Streamlined Sales Tax Project (SSTP) took its most significant step to date to implement the collection of sales taxes on online purchases, a potential $20 billion-a-year bonanza for cash-strapped states."

And a boat anchor on the economy!

If you want more of something, subsidize (i.e. don't tax) it, and if you want less, tax it.

The states need to get a handle on costs and outrageous agreements with state worker's unions.


33 posted on 07/09/2005 7:59:46 AM PDT by SpinyNorman (Liberals are enablers for terrorists and other anti-American groups.)
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To: nickcarraway

Hey, it's just a "fair tax." Aren't many in favor of a national sales tax? What is the difference if the states go after their piece first? What, don't like the idea that every bit of commerce in which you engage sends a little bit to a gubermental entity? Better get used to it if the "fair tax" people have their way.


34 posted on 07/09/2005 8:07:47 AM PDT by NonValueAdded ("Iraq is the bug light for terrorists" (Mike McConnell 7/2/05))
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To: chainsaw

That's a good point. And .. I do that a lot too - especially if I can go to a store locally and actually look at the product.

Your point is well taken .. and I may start doing that more often.

However, I don't have a problem with Staples or Office Depot for basic things such as paper - because then they get to haul a couple of cartons of paper - not me.


35 posted on 07/09/2005 8:31:31 AM PDT by CyberAnt (President Bush: "America is the greatest nation on the face of the earth")
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To: EGPWS

You caught on .. LOL!

These people never stop with the taxing of anything that moves and a few things that don't.

But .. I do think it will put a damper on the booming economy .. so they better think twice about it.


36 posted on 07/09/2005 8:35:37 AM PDT by CyberAnt (President Bush: "America is the greatest nation on the face of the earth")
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To: Sandy
Those sections aren't about interstate sales; they're about imports/exports to & from foreign countries.
No tax or duty shall be laid on articles exported from any state.

No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another: nor shall vessels bound to, or from, one state, be obliged to enter, clear or pay duties in another.

It's clearly referring to interstate not to or from foreign countries
37 posted on 07/09/2005 8:38:00 AM PDT by lewislynn ( Is calling for energy independence a "protectionist" act?)
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To: nickcarraway
A significant factor in the internet sales boom is the fact that there has been no tax to pay for many of the purchases. If that goes away, purchases will decrease dramatically. The $20B figure is based on static analysis, but dynamic analysis is more appropriate.

Internet purchases might also be reducing the need for gasoline, because less people are running all over the place trying to find the items they want to buy locally.

38 posted on 07/09/2005 8:47:25 AM PDT by savedbygrace ("No Monday morning quarterback has ever led a team to victory" GW Bush)
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To: wildbill
Online gives me chance to read reviews of a book before I spend money. Often the discounts are much better, there is no sales tax and computer books are generally in excess of $25 so the shipping is free too.

The nearest decent bookstore to my house is a Barnes & Noble in Idaho Falls. That is a 50 mile trek north and the inventory isn't all that good. Even with the annual membership, I'm in a losing position after paying for 100 mile round trip, local sales tax and a poorer overall discount than I could achieve with a direct online purchase.

I enjoy my business trips to the northern Virginia area. The Borders book store on Route 7 near Tysons Corner has a pretty decent computer section. I often make a purchase there and cover it by underrunning my food per diem.

39 posted on 07/09/2005 2:43:55 PM PDT by Myrddin
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To: Myrddin

As a retired graduate student and part-time college instructor I need cheap books, especially text books. I can get them online, sometimes at fabulous discounts.

Try to find a used book at your local brick and mortar store.


40 posted on 07/09/2005 4:36:15 PM PDT by wildbill
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