Sen. Enzi Urges Congress to Focus on Fair Collection of Sales Tax

On November 19, in a speech on the Senate floor, Senator Mike Enzi (R-WY), after commending Congress for extending the moratorium on Internet access taxes for the next four years, called on Congress and President Bush to refocus their energies on his Streamlined Sales and Use Tax Act (SSUTA, S.1736). Enzi and Senator Byron Dorgan (D-ND) introduced the bill, which would ensure that the tax system is fair to Main Street businesses, in October 2003.

Senator Mike Enzi (R-WY)

"I am anxious to refocus some of our energy on [S.1736]," Enzi said. "[SSUTA] would simplify the extremely cumbersome network of state sales and use taxes and help states begin to recover from years of budgetary shortfalls. The bill would authorize states that have signed [SSUTA] and have passed legislation simplifying their tax system to require all sellers to collect and remit sales taxes."

Enzi's comments came on the same day that the U.S. House of Representatives approved the Senate's version of the Internet Tax Nondiscrimination Act (S. 150), which extends the Internet Tax Freedom Act of 1998 and bans federal tariffs on most Internet connections for the next four years, as reported by InternetNews.com [1]. However, the moratorium does not apply to the collection of sales tax on e-commerce transactions.

Enzi's bill, S. 1736, would streamline the country's more than 7,500 diverse sales tax jurisdictions by allowing states that become voluntary members of a national compact to require remote sellers to collect and remit sales and use taxes. The national compact was made in 2002 by 34 states and the District of Columbia and is also called SSUTA. The compact outlines a comprehensive system to simplify the states' sales tax rules and to dramatically reduce red tape for America's businesses. States that do not simplify their sales and use tax system for all sales do not have the authority to collect tax on remote sales.

Furthermore, states that do not choose to become members of the compact would not be required to make any modifications to their tax systems, but would have the opportunity to join the compact and implement the simplification requirements at any time.

"My streamlined bill … is a critical bill that many of my colleagues are learning more about and recognizing its growing importance as Internet usage explodes," Enzi said in his speech. "Two years ago the revenue loss attributed to the Internet sales tax loophole was fairly minimal. Today, the revenue loss has ballooned as online and other remote sales have increased. The states have responded to this budget crisis by signing the Streamlined Sales and Use Tax Agreement and implementing legislation that drastically simplifies their sales and use tax systems. In fact, 21 states have already signed into law the necessary implementing legislation, while eight others are currently in the process of doing so."

Enzi continued, "As the states continue to make progress on reforming their sales tax systems, I would urge Congress to make progress on a bill that will provide to the states the authority they need to collect their own taxes. I intend to introduce the Streamlined Sales and Use Tax Act again next year and hope to work with the Finance Committee Chair and other members of the Senate to pass it into law." --David Grogan [2]