Sales Tax Initiative

Two recent rulings against the online arms of two chain bookstore giants will likely have nationwide ramifications in the ongoing argument over what constitutes nexus in a state and which businesses are required to collect online sales tax.

On April 16, at a meeting in Washington, D.C., delegates of the Streamlined Sales Tax Implementing States (SSTIS) agreed to amend some portions of the Streamlined Sales and Use Tax Agreement (SSUTA) in an effort to keep sales tax simplification on schedule for October 1, as reported by Washington Retail Insight (WRI), a newsletter of the National Retail Federation. SSUTA would help states begin to recover from years of budgetary shortfalls by collecting revenue lost through catalog and Internet purchases.

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.

On Thursday, May 20, Michigan's House of Representatives passed legislation that would streamline the tax codes to make it easier for businesses to collect state sales and use tax on Internet and catalog purchases, the Associated Press reported. Rep. Lorence Wenke (R-Richland), chairperson of the House Tax Policy Committee, introduced the main bill in the four-bill package (H.B. 5502 - 5) and stressed, "This is not a new tax, but rather a tax already owed by Michigan citizens.

On Wednesday, March 10, in a speech before the National Conference of State Legislators (NCSL), at the Washington Court Hotel in Washington, D.C., Senator Michael Enzi (R-WY) called on NCSL members to support the Streamlined Sales & 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 the Senate in October 2003.

In this column, which originally appeared in the March 3, 2004, edition of San Jose, California's The Mercury News, editorial writer Miguel Helft explains how calls for "no new Internet taxes" are "nothing more than an attempt to rob states and local governments of billions from an old tax they count on to provide essential services." You Didn't Pay Sales Tax on That Amazon Book, Did You? By Miguel Helft You're probably a tax cheat.

In the past year, in both the U.S. House of Representatives and the Senate, bills have been introduced that would allow states to simplify sales tax regulations and give states the authority to require remote sellers to collect and remit sales and use taxes. It is expected that the bills would help states begin to recover from years of budgetary shortfalls by collecting revenue lost through catalog and Internet purchases.

On Wednesday, October 15, Senator Michael Enzi (R-WY) introduced legislation (S. 1736) in the Senate that would allow states to simplify sales tax, with equal tax treatment between local merchants and remote sellers. The bill, the Streamlined Sales and Use Tax Act (SSUTA), would help states begin to recover from years of budgetary shortfalls by collecting revenue lost through catalog and Internet purchases. The bill is co-sponsored by Senator Byron Dorgan (D-ND).

Many states, cities, and counties are watching their sales tax revenues decrease and their budget shortfalls grow as more and more consumers buy via the Internet, where many national retailers do not collect sales tax. Some politicians in Washington are looking to address this issue by introducing legislation that would give states the power to enforce simplified rules for collecting sales tax across state lines.

On Thursday, September 25, Representatives Ernest Istook (R-OK) and William Delahunt (D-MA) introduced legislation in the U.S. House of Representatives that would allow states to simplify sales tax, with equal tax treatment between local merchants and remote sellers.