Get Ready For Internet Sales Taxes In 2009


Attention, online shoppers! This may be the last holiday season you can dodge sales taxes by buying presents on the Web. State legislators, retailers and lawyers say 2009 may be the year Internet taxes finally come to pass.

The idea, which would levy sales tax on most goods bought online, has been tossed around for nearly a decade. A perfect storm of factors, including record state budget deficits, a new Congress and continued e-commerce growth, appear likely to rekindle the issue. Experts say that cash-strapped states view this revenue, estimated to be several billions of dollars, as money left on the table.

“States are coming up with huge deficits and looking for places to make money,” says Eric Menhart, the principal of CyberLaw, a Rockville, Md.-based law firm that concentrates on technology legal issues. “All of a sudden, Internet taxation appears a lot more viable.”

Spotting an opportunity, legislators and other proponents of Internet taxation are renewing their efforts. Scott Peterson, executive director of the Streamlined Sales Tax Governing Board, a group that oversees states’ efforts to simplify and modernize sales tax issues, says legislators from Florida, Illinois, Massachusetts, Texas and Virginia, among others, have recently contacted him about the issue.

The plan: to reintroduce legislation as early as January when the new Congress takes office. The legislative route is necessary because the Supreme Court ruled in the 1990s that states can’t require out-of-state retailers to collect sales tax on online sales. Proponents believe that making their case to Congress would be faster and more practical than wending their way through the courts.

Photo by enimal.

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