States, Congress Eyeing Sales Taxes on Internet Purchases

CNSNews.com - States, Congress Eyeing Sales Taxes on Internet Purchases

More taxes on the way from the administration that promised only to tax the top earners of the country. But it could never be with their spending plans. NOTHING is free, we will all have to pay for this spending through higher taxes.

(CNSNews.com) – Budget-strapped states are eyeing a new way to get more of your money – through sales taxes on Internet purchases. It’s coming, says a taxpayer watchdog group.

A bill that would force Internet businesses of all sizes to collect sales taxes on goods and services purchased online could be introduced in Congress this week, warns the National Taxpayers Union. NTU opposes any effort to impose “oppressive taxation” on the Internet, and it says politicians of both parties should reject the attempt.

“As many states continue to face record budget shortfalls, it is not surprising that they have turned to taxing online commerce in a desperate attempt to pay for their profligate spending,” NTU said in a news release.

“State and local government officials are leaning hard on Members of Congress to pass the bill to provide them new avenues into taxpayer wallets. They are particularly focusing on convincing Republicans to join the effort, in the hopes that bipartisan support of the tax hike will improve its prospects.”

Right now, there are thousands of diverse sales tax jurisdictions in the United States. In 1992, the Supreme Court ruled that such a patchwork of tax systems would make it unduly burdensome for businesses to collect and remit sales taxes on behalf of states where the company had no physical presence. The court also ruled that Congress “has the ultimate power to resolve” the situation.

A bill implementing the “Streamlined Sales Tax Project” (SSTP) would set up a process for states and local jurisdictions to simplify and streamline their sales tax systems and adopt uniform product definitions. That would make it easier to require out-of-state sellers to collect taxes on remote sales.

Sen. Mike Enzi (R-Wyo.) and Rep. William Delahunt (D-Mass.) have introduced the “Sales Tax Fairness and Simplification Act” in previous sessions of Congress, and they’re expected to do so again very soon.

Enzi has said that the bill would “level the playing field for all in-store, catalog and online retailers so each has the same sales tax responsibilities.”

"Simply put, if Congress continues to allow remote sales taxes to go uncollected and electronic commerce continues to grow as predicted, other taxes, such as income or property taxes, will have to be increased to offset the lost revenue to state and local governments. I want to avoid that," Enzi said in a May 2007.

But the National Taxpayers Union says taxing Internet sales “would threaten the shining example of free markets that is the Internet.”

"It is unfathomable that lawmakers, in good conscience, would place yet another tax burden on American families given our current economic climate," said NTU Director of Government Affairs
Andrew Moylan. "Passage of SSTP legislation would shovel more money into the coffers of states that don't deserve it, while resulting in even more economic pain for hard-working taxpayers who have suffered enough.