Washington (Oct. 20, 2003) -- Advocates of new legislation mandating the collection of state sales tax on remote Internet purchases are packaging their latest plan as an effort to avoid income tax rate increases.
“This bill is not a disguised attempt to increase taxes or put a new tax on the Internet,” Sen. Mike Enzi, R-Wyo., told the Senate. “Consumers are already supposed to pay sales and use taxes” on remote Internet and mail order purchases, but most “are unaware they are required to pay this use tax on purchases for which retailers choose not to collect sales tax at the time of purchase.”
Enzi’s proposed new Streamlined Sales and Use Tax Act would correct that situation by effectively requiring Internet, mail order and telephone sellers to collect the appropriate sales taxes on all purchases, even if the seller has no physical presence in the buyer’s home state.
While the measure is designed to help recapture the $13.5 billion in revenue that was lost last year due to uncollected sales taxes, Enzi contends that his bill “is not about new taxes. Simply put, if Congress continues to allow remote sales taxes to go uncollected and electronic commerce continues to grow as predicted, other taxes--such as income or property taxes--will have to be increased to offset the lost revenue,” he argued.
Enzi’s measure, and companion legislation introduced in the House by Rep. Ernest Istook, R-Okla., are designed to overcome the effects of court rulings that have effectively blocked efforts to impose sales taxes on most electronic retailers.
-- Ken Rankin
