The Associated Press reports that the US Congress is being petitioned by state and local officials to allow them to begin collecting sales taxes on items acquired via e-commerce.
The problem isn't that states don't require people to pay taxes on Internet purchases - in fact, 45 of them do. But almost nobody enforces those laws, and the US Supreme Court has ruled that states can't force a business to collect sales taxes unless it has a store or other physical presence in the state.
Hence the creation of the Streamlined Sales Tax Project, signed onto by 20 states, designed to create legislation that will provide a mechanism that will force online retailers to collect the taxes.
The push for sales taxes to be collected on Internet purchases comes from state and local governments that are under a great deal of financial pressure and need to find new revenues to pay for existing services, as well as from brick-and-mortar retailers that believe e-commerce has had an unfair advantage because of the lack of sales taxes.
The problem isn't that states don't require people to pay taxes on Internet purchases - in fact, 45 of them do. But almost nobody enforces those laws, and the US Supreme Court has ruled that states can't force a business to collect sales taxes unless it has a store or other physical presence in the state.
Hence the creation of the Streamlined Sales Tax Project, signed onto by 20 states, designed to create legislation that will provide a mechanism that will force online retailers to collect the taxes.
The push for sales taxes to be collected on Internet purchases comes from state and local governments that are under a great deal of financial pressure and need to find new revenues to pay for existing services, as well as from brick-and-mortar retailers that believe e-commerce has had an unfair advantage because of the lack of sales taxes.
- KC's View:
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The funny thing about this push is that proponents are suggesting that it involves no new taxes, only taxes already due but unpaid.
Which may be technically true, but remains a crock.
As far as consumers are concerned, the Internet has been tax-free. If the Streamlined Sales Tax Project has its way, now they will. That sounds like new taxes to us.
We must admit, though, that we've changed our mind on this one. We used to think that the Internet ought to remain sales tax-free, but have come to believe that the significant revenue problems being suffered by states and localities need to be alleviated.
