Two proposed federal bills have been submitted in the Senate that support mandatory collection of Internet sales tax. It is likely that they are forged into a single bill to settle issues like exemptions for small retailers.


Two proposed federal bills have been submitted in the Senate that support mandatory collection of Internet sales tax. It is likely that they are forged into a single bill to settle issues like exemptions for small retailers.

John Logan, senior state tax analyst at CCH Inc., said: “As we get further into 2006, some of the unsettled issues will get settled, making passage of a joint bill more favorable”. [source]

Two versions of internet sales tax bills, one Republican and the other Democratic, were submitted last month by Senators Michael Enzi (R, WY) and Byron Dorgan (D, ND).

The Streamline Sales and Use Tax Agreement, or SST, has sought federal backing for simplifying the collection of sales tax for Internet and catalog sales across state borders.

Without federal legislation, the SST can only operate as a voluntary program on the part of both retailers and the participating states.

The difference between the Republican and Democratic version is related to the small business retailers. Republican Enzi has specified that retailers doing less than $5 million a year should be exempt from tax but Democratic Dorgan has said that the U.S. Small Business Administration should set a threshold for participation.

“Large multi-state retailers, including Amazon, have expressed concern that a high-dollar exemption could let thousands of small retailers, including sellers on eBay.com doing under $5 million a year, sell tax-free at an unfair advantage.” [source]

 

 

 

 

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