Originally published July 26 2005
Eighteen tax collectors take another step toward internet tax
by Mike Adams, the Health Ranger, NaturalNews Editor
Many states are having to tighten their budget belts, but 18 state tax collectors agreed on a set of sales tax rules for internet purchases, which Ecommerce-guide.com reports will increase revenue for states, contingent on the tax rules approval by Congress.
The Internet sales tax issue may have reached the tipping point when 18 state tax collectors agreed upon an interstate set of sales tax rules.
Meeting in Chicago last week, the Streamlined Sales Tax Project (SSTP) took its most significant step to date to implement the collection of sales taxes on online purchases, a potential $20 billion-a-year bonanza for cash-strapped states.
To bring those funds closer to state and local coffers, the SSTP officially admitted 18 states as members of the Streamlined Sales and Use Tax Agreement's (SSUTA) governing board.
The interstate alliance plans to offer retailers free software to voluntarily collect sales taxes by October.
Under the SSUTA compact, the simplified sales tax system cannot take effect until at least 10 states representing 20 percent of the total population are in compliance with the agreement.
Despite the landmark agreement, though, no one is under any legal obligation to collect online sales taxes until Congress approves the deal.
States have struggled for years to force catalogue and online retailers to collect sales taxes on purchases.
In 1992, the U.S. Supreme Court said states could only require sellers that have a physical presence or "nexus" in the same state as the consumer to collect the so-called use taxes.
The court also ruled that buyers owe the tax, but the current patchwork of more than 7,500 taxing jurisdictions across the country is too complex and burdensome for online retailers to charge and collect sales taxes.
To collect the taxes, the court ruled, states would need to first simplify the existing system.
More and more people are making purchases through remote businesses, such as online, catalog and phone-order," Enzi said when he introduced the bill.
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