States to Try Again for Sales Taxes on Internet Purchases
Godfrey, John, The Washington Times (Washington, DC)
States are taking another step toward a national system that would allow them to impose sales taxes on purchases made over the Internet.
The idea has anti-tax advocates boiling and federal lawmakers tossing aside their concerns about local control.
"My goal and the goal of the National Conference of State Legislatures is to educate the people that this is not a new tax," said Joanne Emmerson, chairman of the Missouri state Senate Finance Committee and chairman of the NCSL's Commerce and Communications Committee.
She and other state and local legislators argue that mail-order and Internet business should not be allowed to avoid the sales taxes that storefront businesses must pay.
Mail-order businesses, joined more recently by Internet firms, have argued that they cannot reasonably know what obscure sales taxes are due in thousands of jurisdictions nationwide.
Confusing the matter is the question of whether the states should be allowed to tax Internet services, such as stock transactions, Internet access, advertisement on World Wide Web pages and the like. A federal moratorium continues on such taxes, but Internet providers are tying both arguments into one single campaign.
Though the voting public largely has passed on the issue, companies are backing their interests with cash. Gateway alone has made $358,000 in soft-money donations, nearly three-quarters of which went to Republicans, according to Common Cause.
Sen. Orrin Hatch, Utah Republican, said his governor "feels very strongly that we're going to lose Main Street, USA, if we don't allow the same type of tax on e-commerce transactions that we do on state transactions. I'm not sure he's right about that."
Sen. John McCain, Arizona Republican, who joined Mr. Hatch at a recent debate of presidential hopefuls, said sales tax revenues have increased in recent years.
"I believe that that's ample testimony that the Internet will increase sales taxes, and the governors are incredibly shortsighted when they want to tax this baby in its cradle," Mr. McCain said. …