The argument over collecting taxes for online purchases has pitted Web-based retailers, often known as e-tailers, on one side and the brick-and-mortar retail stores on the other. The issue has also cut across the usual political spectrum divisions. Some conservative Republicans back Web taxes as a way to keep state and local governments from losing their tax base, and some Democrats with concentrations of high-tech constituents favor maintaining the Web as a tax-free haven.
A good example of this mix came on February 8, when Senator Ron Wyden (D-OR) and Representative Christopher Cox (R-CA) introduced their latest measure to extend the current Web tax moratorium, scheduled to expire in October, for another five years. The bill, known as the Internet Tax Nondiscrimination Act also encourages states to simplify and unify their sales and use taxes, including taxes on telecommunications services.
A bipartisan group called the Streamlined Sales Tax Project (SSTP) aims to do what Wyden and Cox suggest – simplify sales and use taxes, as well as make them uniform across the country. STTP proposes one easy way of computing and collecting sales taxes that vendors in any state or city can use apply to all forms of commerce. The group’s next meeting is set for March 6 in Dallas, Texas.
SSTP has written a model Uniform Sales and Use Tax Administration Act and Streamlined Sales and Use Tax Agreement that the group has sent to the states for review. So far some 30 states have agreed to participate in the project, with Vermont joining the project in February. The group lists another nine states as observers.
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