[thelist] Internet taxation

Keith cache at dowebscentral.com
Wed Jan 15 12:28:00 CST 2003


Many of the state governments are in hard times looking for new sources of
tax revenue. In our state they are once again raising the issue of taxing
internet sales. And this time there is no talk of going through Congress to
do it.

The National Conference of State Legislatures is pushing a plan in 46 state
legislatures that would by-pass the grid-locked federal level. They call it
a "preemptive strike", macho talk for "we better get our mitts on that
money before Congress does".  They are predicting that 10 to 20 state
legislatures will adopt their program this session. The scheme is to put
the framework into state law this spring so Congress will be relieved of
the responsibility (and revenue) and therefore pass the minor Congressional
measures to enable it by November, probably attached as an undebated
amendment to some bill authorizing horse feed inspections.

The frightening thing about this push is that it has the active support of
large e-retailers and some large software companies. That's because the
byzantine reporting requirements will be beyond the ability of small
e-retailers (which makes this a competitive tool for large e-retailers).
E-retailers will either have to buy the NCSL certified software, buy the
services of a NCSL certified collection agency, or go out of business.

I've always maintained that if we (the internet professionals) do not find
a workable way to tax our sales, we will end up with an unworkable method
being pushed down our throats. (There are simple, equitable ways to do
sales taxation that would actually benefit our industry - this isn't one of
those ways.)  When I first heard about it my reaction was "Yeah, in your
dreams..." But looking at it a second time was an eye-opener.  NCSL has
already certified the software and already has the collection agencies
signed up for certification. They claim the framework is 95% in place in 46
states. The effort is well financed and hey, they're talking to greedy,
desperate people, your state legislator, who sees this as an opportunity to
tax "the other guy" rather than his constituents.

Many of us on thelist cater to only large e-commerce clients, many to the
small-business e-commerce clients. How many of those small-business clients
will leave is less important than how many new ones will back off and never
come through our doors with one more added level of complexity and expense
to their new venture.

How many of the people on the list have seen this issue in their current
legislature? How many are aware that it is actually an issue in your
legislature?


Keith
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cache at dowebscentral.com




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