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Sales Internet Tax. History ... The Internet Tax Freedom Act really did not address
the issue of collecting sales tax on the Internet. Many ...
... Out of fifty states, forty-five impose state sales and use tax. These states are
seeing the consequences of zero Internet sales tax collection. ...
... they are losing business to Internet sales, many local merchants are going on line
themselves to take advantage of the low overhead and absence of sales tax. ...
... However, now that it has grown and has stabilized out it is time to place a sales
tax for all internet transactions that take place on this global market-place ...
... However, now that it has grown and has stabilized out it is time to place a sales
tax for all internet transactions that take place on this global market-place ...
Submitted by mikeymyles on May 17, 2007
Category: Technology
Words: 2509 | Pages: 11
Views: 298
Popularity Rank: 35,573
Average Member Grade: N/A (Add a Comment / Grade this Paper)
History of Internet Sales Tax
"Internet transactions have virtually eliminated the geographic boundaries between states and localities that formerly provided the framework for sales and use taxation. As a result, a national tax policy must be developed through either uniform state laws or federal legislation. Any federal legislation or uniform state laws developed to regulate interstate electronic commerce must balance the needs and concerns of state and local taxing authorities with the needs of businesses and consumers. This balance must occur within the framework of basic tax principles of fairness and equality and minimization of administrative and compliance burdens." (Owen, 1998, p.245).
In order for Congress to approve any standard process, there will have to be a major simplification of individual state tax codes and a consensus among the states. "The U.S. Supreme Court has ruled twice (once in 1967 and again in 1992) that unless the vendor has a physical presence in the taxing state (such as employees, a warehouse or a retail location), the state cannot require the vendor to collect, on the basis that there are more than 6,000 taxing jurisdictions in this country and requiring remote vendors to comply with all these different laws is too burdensome," (Piersol, 2003, p.1). The Court has said Congress has the power to change this policy. Congress could pass legislation to require remote businesses to collect and remit sales tax.
In 1998, Congress passed The Internet Tax Freedom Act Moratorium. The Act imposed a three year moratorium on both taxes on Internet access and multiple or discriminatory taxes on electronic commerce, unless in either case the tax was imposed and enforced before October 1, 1998. The moratorium also prohibited state and local governments from imposing similar new taxes between October 1, 1998 and October 20, 2001. Congress extended this moratorium in 2001 and it is set to expire by...
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