|
by Harry Rabb, C.P.A.
Special to Tropical Breeze
Following up on my recent article
concerning Internet sales tax, it now seems that the National
Retail Federation (NRF) and nearly 100 retailers and trade
associations are asking Congress to approve legislation making it
easier to require Internet merchants, mail-order houses and other
"remote sellers" to collect sales tax across state lines.
The letter was signed by 98 members of the
"Sales Tax Simplification Coalition," which includes individual
retailers along with NRF, a number of state retail trade
associations, and other associations representing retail segments
such as book stores, convenience stores, college stores and
shopping centers.
The letter went to Senator Mike Enzi,
R-WY, sponsor of the Senate version of the bill, S. 34, along with
Representative William Delahunt, D-MA, the sponsor of the House
bill, H.R. 3396, and co-sponsor Representative Ray LaHood, R-IL. A
similar letter was to go to all members of the House and Senate by
the end of September.
Coalition members are hoping to see action
this fall on the "Sales Tax Fairness and Simplification Act" (which
probably means it will be neither), which is pending in both the
House and Senate. The measure would allow states that have
implemented the Streamlined Sales and Use Tax Agreement to require
that out-of-state merchants collect sales tax on merchandise sold
to residents of their states. Retailers would be compensated for
the cost of sales tax collection, and collection could be
outsourced to certified service providers. Retailers with less than
$5 million in annual gross remote sales would be exempt.
The Streamlined Sales and Use Tax
Agreement, which simplifies sales tax law and creates a mechanism
for collection and distribution across state lines, was developed
in 2002 in response to a 1992 U.S. Supreme Court ruling that said
remote sellers could only be required to collect sales tax from
customers in states where they have a physical presence. With more
than 7,600 state and local jurisdictions collecting sales tax --
many with different rates, different lists of taxable items and
different definitions -- the court held that out-of-state merchants
could not be expected to know what to collect.
The agreement went into effect on a
voluntary basis in 2005 but passage of federal legislation is
needed before sales tax collection can become mandatory. This
week's letter noted that 22 states have passed legislation
implementing the agreement. In addition, more than 1,000 companies
have participated in the agreement voluntarily and have collected
more than $125 million in state and local sales tax that would
otherwise have gone unpaid.
NRF helped draft the Streamlined Sales and
Use Tax Agreement, and has long argued that remote sellers enjoy an
unfair price advantage in situations where they are not required to
collect sales tax. NRF supports a level playing field where all
retailers are subject to the same tax rules where their merchandise
is sold from a store, through a catalog or over the Internet.
• • •
This information is provided as a public
service and should not be construed as individual accounting or tax
planning advice. For information on how these general principles
apply to your situation, please consult an accounting or tax
professional.
Harry Rabb is a C.P.A. and owner of
Accounting Services, Inc., 935 Main Street, Suite D-1, Safety
Harbor. Call 727-725-4121.
|
Front Page 
Columns 
