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December 26, 2005

Internet Sales Tax Proposed Again in Congress

While Internet sales are climbing steadily each year, the fact that most purchases aren't taxed has really rankled the states.  Every year there are attempts to introduce a collection scheme into law via Congressional action.  This year is no exception.  Senators Enzi and Dorgan have introduced separate bills that would force retailers to collect out-of-state sales tax on purchases made over the Internet.

The problems encountered by past attempts include the complicated sales tax system of the combined states, the lack of an infrastructure that can adequately track taxable transactions, and a desire on some part to see commerce grow online by keeping it more or less tax free.

At least one of these obstacles is starting to fade.  18 states are forming a compact that would simplify their sales tax structures.  The are now part of an organization called the Streamlined Sales Tax Project (SSTP).  Simplified sales taxes are one part of Quill v. North Dakota's requirements.  The 1992 Supreme Court case also called for a federal law making the interstate collections possible.

More news of the the SSTP is here.  More news on the new legislation is here.  The SSTP web site is here.  A copy of Sen. Enzi's bill is here.

December 26, 2005 | Permalink


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