Collecting Internet sales tax (WSJ)

Tomorrow 18 states will begin the Streamlined Sales Tax Project, a computer program to track the tax rates of their states and localities and automatically add the tax to every online purchase. ("Some states push to collect sales tax from Internet stores," Wall Street Journal, Sept. 30, B1.) Online retailers have argued that differing state and local tax rates make collecting taxes too complex, and a 1992 Supreme Court ruling supported that position. An economist has estimated that state and local governments will lose $18 billion in online sales taxes in 2005. To get their share, the 18 states have joined forces "to simplify their myriad tax rules, regulations and quirks."

Of the 18 states, 13 have signed on (Indiana, Iowa, Kansas, Kentucky, Michigon, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota, and West Virginia), and five are in the final stages to join (Arkansas, Ohio, Tennessee, Utah, and Wyoming). Washington, Texas, and Nevada are in the pipeline. To encourage retailers to participate, the project offers an amnesty on past uncollected taxes. Wal-Mart and J.C. Penney have signed on. (WSJ is available in the Library)

See also:
Streamlined Sales Tax Project (HTML from SSTP)


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