States Continue Quest for Simple Sales Tax: Watching Millions in Revenues Slip Away on Internet Sales, States Have to Simplify and Coordinate Their Various Tax Systems with an Acceptable, Universal Way to Collect Sales Taxes

By Tubbesing, Carl; Williams, Graham | State Legislatures, May 2002 | Go to article overview

States Continue Quest for Simple Sales Tax: Watching Millions in Revenues Slip Away on Internet Sales, States Have to Simplify and Coordinate Their Various Tax Systems with an Acceptable, Universal Way to Collect Sales Taxes


Tubbesing, Carl, Williams, Graham, State Legislatures


Forty-four state legislators, revenue officials and retailers met in Salt Lake city, Utah, late last November to take the next step in an unprecedented effort to simplify state sales tax systems.

The occasion was the first meeting of the first 23 states to pass model streamlined sales tax laws. Their immediate task in Salt Lake City was to adopt operating rules, elect officers and agree to a work plan. Their ambitious goal over the next few months is to approve a final interstate agreement that legislatures will consider beginning as early as this fall.

"The progress we have made is simply extraordinary," notes Tennessee Representative Matt Kisber, one of the key figures in the effort. "There are now 28 states with over half of the country's population engaged in these talks. Of course, it's too early to gush about how far we've come. We are now down to some of the hardest issues."

The streamlined sales tax movement is the response of state officials and members of the private sector to the billions of dollars of Internet sales that occur each year. The Supreme Court ruled in two cases--National Bellas Hess in 1967 and North Dakota vs. Quill in 1992-- that a state cannot force an out-of-state retailer to collect sales tax on purchases shipped into that state. The court acknowledged that the buyer owes the tax; however, the company making the sale is not obligated to collect it. Translation: A teacher in Kearney, Neb., goes online to buy a pair of gloves from Land's End in Wisconsin. The teacher owes the 6 percent sales tax to Nebraska, but neither the Legislature nor the state's revenue department can force Land's End to collect it. Because this teacher and millions of other consumers do not "'fess up" and remit the money, state and local governments lost as much as $13 billion last year in uncollected sales and use taxes--a number that is expected to triple by 2006. And retailers who c ollect sales taxes feel put upon because they are forced to add it to a consumer's bill while out-of-state competitors are not.

The court left open the possibility of reversing itself if state sales tax systems were changed to meet certain conditions. The key condition? Eliminating the administrative burden that most state and local sales tax systems impose on out-of state retailers. The court reasoned that it is an undue burden on interstate commerce for remote sellers to keep up with the various sales tax structures of 46 states and the thousands of local jurisdictions that have these taxes. State legislators, governors and revenue officials view simplification as a road map for convincing either Congress or the courts to overturn the two decisions.

They have taken the rulings as an invitation to streamline and simplify state and local sales tax systems--to make them less complicated and less burdensome for consumers and retailers. The Salt Lake City meeting was the culmination of the first phase and the beginning of the next stage in this long-term effort.

Work began in late 1998 when the executive committee of the National Conference of State Legislatures created a task force on State and Local Taxation of Telecommunications and Electronic Commerce. A little over a year later, the task force endorsed model legislation that directed state revenue departments to enter into multistate discussions to develop a simpler and more uniform system of sales and use tax collection. Thirty-two states formally joined these discussions, called the Streamlined Sales Tax Project (SSTP). In January 2001, SSTP and the NCSL task force endorsed different, but complementary versions of a model sales tax simplification act. Wyoming and Utah, two months later, became the first to pass versions of the model act. At press time, 28 states had joined them and are now participating in the next phase of the simplification process that began with the meeting in Salt Lake City. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

States Continue Quest for Simple Sales Tax: Watching Millions in Revenues Slip Away on Internet Sales, States Have to Simplify and Coordinate Their Various Tax Systems with an Acceptable, Universal Way to Collect Sales Taxes
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.