Internet taxes: ban or simplify or both?

No taxes, but simplify as well

The Internet Tax Moratorium and Equity Act, introduced by Sen. Byron Dorgan (D-ND) and Rep. Ernest Istook (R-OK) combines the idea of tax simplification with the moratorium on Internet taxes. Dorgan and Istook provide another example of a political odd couple that rarely agrees on most legislative issues. Their bills also extend the tax moratorium, but add on measures to encourage states to develop standards for streamlining sales and use taxes involving remote (i.e. out-of-state) sales. The bills authorize states to enter into an interstate compact – a formal agreement among states – to enact a uniform sales and use tax system.

Istook also testified before the same House Judiciary subcommittee about a month after Cox, and his testimony stressed the need to keep state and local governments viable. Istook said, “What will happen if Congress fails to enable states to establish a simplified system to collect sales or use taxes from remote sellers? The consequence will be a major shift of more power to the national government, reducing the power of state and local governments. The only alternative I see is that states and communities will push hard to increase property taxes and income taxes, to replace the tax loss from their sales tax base, and I find that alternative unacceptable.”

Many of the states have already started simplifying their sales and use tax structures independently of the Congress. The Streamlined Sales Tax Project (SSTP), created by state governments, seeks to simplify sales and use tax collections. It provides uniform definitions of tax bases (what is taxed and what is exempt), simplifies audit and administrative procedures, and encourages more use of new technologies to reduce tax collection burdens. The project is voluntary, but some 38 states are taking part in it. So far, 15 states have enacted SSTP legislation, while 6 states are considering its recommendations in their current legislative sessions.

Links:

Legislative sponsors ...

Chris Cox, http://www.house.gov/chriscox/

Ron Wyden, http://www.senate.gov/~wyden/

Byron Dorgan, http://www.senate.gov/~dorgan/

Ernest Istook, http://www.house.gov/istook/

Streamlined Sales Tax Project, http://www.geocities.com/streamlined2000...

Go To Page: 1 2