Statement on New Internet Sales Tax Legislation S. 1452
WASHINGTON - ITIF Senior Analyst Daniel Castro made the following statement on Internet sales tax legislation introduced in the U.S. Senate last week.
"Congress should create a system for collecting sales taxes that is fair as well as simple for businesses and consumers. However, Congress should keep in mind that many existing laws and regulation in various states favor local businesses at the expense of online businesses. As Congress seeks to level the playing field between online businesses and brick-and-mortar stores with respect to sales tax, it should look across the board at ways to create national policies that are non-discriminatory and technology-neutral."
On July 29, 2011 Sen. Richard Durbin (D-IL) introduced S. 1452. The legislation, the "Main Street Fairness Act," would allow states to collect sales taxes from retailers for online purchases. It is similar to legislation introduced in the previous Congress.
For more details and history on the background of Internet sales tax issue, please see ITIF's publication Closing the E-Commerce Sales Tax Loophole.
In this report ITIF explains how Congress could effectively level the playing field for businesses and recommends, "Congress should grant states the authority to require Internet retailers to collect sales tax on e-commerce under a simplified tax system provided that states also agree to eliminate restrictive regulations hurting e-commerce."