| Sales Tax on the Internet -- Could it Happen? | |
| Dateline: 03/20/00 |
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UPDATED*
A committee is meeting in Dallas this week that will ultimately affect us all. The Advisory
Commission on Electronic Commerce is conducting their final round of meetings before making a recommendation, by April 21, to Congress on taxes and the Internet.
These meetings, being held at the Fairmont Hotel, are open to the public.
The commission is currently divided on the issue of sales tax on Internet sales.
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Mr. Kimzey said the collections question is so vexing that it amounts to the "the single greatest example of why the U.S. economy ought to move to a value-added tax." | When there are 30,000 different tax jurisdictions, along with a myriad of rates, how will a national tax be accomplished or policed is the question. Another problem being discussed is how would this affect sales outside of the US -- as we obviously cannot require sellers from overseas to charge a sales tax on items sold. |
| Everyone agrees a simplified tax structure must be put into place that would not create an undue burden on the
individuals involved in e-commerce.
The question everyone asks is "How will this affect me"? If a simple tax structure is not implemented, additional costs will be passed onto consumers as merchants struggle with figuring out the numerous forms that will most likely be needed. It is hard to say which sales, if any, might decline if a tax is put into use. When taxes are added to the higher priced items, it will make the storefront merchants more competitive pricewise. Of course, they cry out "Yes, we need it to stay competitive!!" Personally I feel they are competitive as is, as they offer the convenience of personal service and immediate availability.
Why Do We Shop the Internet?
How Will if Affect Collectors?: However, if you are buying a consumer item online that is high priced, it could make a difference of hundreds of dollars of sales tax item. This will level the playing field for merchants on and off line, but we as consumers will ultimately benefit as it will make them both pay more attention to the all important customer service and total price. | |
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What is the Advisory Commission? About the Commission The Advisory Commission on Electronic Commerce (ACEC) was created by Congress to study federal, state, local and international taxation and tariffs on transactions using the Internet and Internet access. The commission's 19 members include three of our nation's governors, heads of several major information technology corporations and other government and business leaders from across the nation. Virginia Governor James Gilmore chairs the commission |
From a Press Release:
Advisory Commision On Electronic Commerce Arrives At Majority Position On Internet Taxation Issues At Final Meeting In Dallas
Dallas, Texas - March 21, 2000 -
The Advisory Commission on Electronic Commerce today closed out its final meeting returning a majority decision
on providing direction to Congress on Internet tax issues. Under the proposal, the Commission voted to:
- Reduce consumers' taxation burden by repealing the federal three-percent excise tax on telecommunications services
- Forge a meaningful pathway to simplification of states' sales and use taxation systems
- Permanently prohibit states or localities from taxing Internet access subscription charges
- Extend the current Internet Taxation moratorium legislated by the Congress on multiple and discriminatory taxation
Related Links:
ECommerce Commission
Internet Sales Tax: Clinton, Govenors Talk
