States Bank On Online Sales Tax - Even Before Congress Decides to End Tax-Free Internet Shopping, Legislators Build New Revenue Source Into Their Budgets
From The Wall Street Journal:
Congress hasn't yet agreed to end tax-free shopping on the Internet, but some states already are planning how they'll spend the money.
Maryland and Virginia both passed transportation bills that counted on the revenue to avoid implementing future state gas-tax increases, which would kick in if Congress turns down the Internet-sales tax bill. In Missouri, residents could see a half-percentage-point cut on their personal income taxes if Congress approves it.
And in the nation's capital, two city council members recently suggested spending the estimated $49 million the District of Columbia would collect from online-sales taxes in 2014 on housing for the homeless.
Congress is considering legislation that would allow states to require businesses to collect taxes on goods or services sold online, over the phone or by catalog. Early this month, the Senate approved the legislation on a 69-27 vote.
The bill faces an unclear future in the House. Some conservatives have raised concerns about the legislation, saying it would essentially be a new tax on consumers, who would have to pay sales taxes that they have mostly avoided. House Speaker John Boehner (R., Ohio) has said he might not support the bill because of concerns it would be tough to implement and could hurt small businesses.
State and local lawmakers say this isn't a new tax because it is something that consumers should have been paying anyway.
States have been trying for more than a decade to collect the money, an effort that has been hampered by a 1992 Supreme Court decision stating states could only require retailers to collect sales taxes if they had a physical presence in the state, such as a store or a warehouse. That case involved catalog sales but also covers online sales.
Opponents of the tax, including many small-business owners, say it will be a burden to comply with the rules in so many tax jurisdictions. The Senate legislation tries to ease the paperwork by requiring states to adopt standards. Also, companies with less than $1 million in revenue would be exempt.
Some states have already begun getting ready to collect the taxes, especially those that operate under two-year budget cycles.
Last year, Alabama lawmakers approved a measure spelling out how the state would spend funds from online sales—if Congress approves the bill. And 24 states have signed on to a national "streamlined sales and use tax agreement," to ease the collection process, according to the National Conference of State Legislatures.
Congress hasn't yet agreed to end tax-free shopping on the Internet, but some states already are planning how they'll spend the money.
Maryland and Virginia both passed transportation bills that counted on the revenue to avoid implementing future state gas-tax increases, which would kick in if Congress turns down the Internet-sales tax bill. In Missouri, residents could see a half-percentage-point cut on their personal income taxes if Congress approves it.
And in the nation's capital, two city council members recently suggested spending the estimated $49 million the District of Columbia would collect from online-sales taxes in 2014 on housing for the homeless.
Congress is considering legislation that would allow states to require businesses to collect taxes on goods or services sold online, over the phone or by catalog. Early this month, the Senate approved the legislation on a 69-27 vote.
The bill faces an unclear future in the House. Some conservatives have raised concerns about the legislation, saying it would essentially be a new tax on consumers, who would have to pay sales taxes that they have mostly avoided. House Speaker John Boehner (R., Ohio) has said he might not support the bill because of concerns it would be tough to implement and could hurt small businesses.
State and local lawmakers say this isn't a new tax because it is something that consumers should have been paying anyway.
States have been trying for more than a decade to collect the money, an effort that has been hampered by a 1992 Supreme Court decision stating states could only require retailers to collect sales taxes if they had a physical presence in the state, such as a store or a warehouse. That case involved catalog sales but also covers online sales.
Opponents of the tax, including many small-business owners, say it will be a burden to comply with the rules in so many tax jurisdictions. The Senate legislation tries to ease the paperwork by requiring states to adopt standards. Also, companies with less than $1 million in revenue would be exempt.
Some states have already begun getting ready to collect the taxes, especially those that operate under two-year budget cycles.
Last year, Alabama lawmakers approved a measure spelling out how the state would spend funds from online sales—if Congress approves the bill. And 24 states have signed on to a national "streamlined sales and use tax agreement," to ease the collection process, according to the National Conference of State Legislatures.
posted by Sid Cottingham | 12:48 PM
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