'Voluntary' Online Tax Proposed
Some powerful groups want you to pay a lot more sales taxes on your
Internet purchases.
The National Governors Association, the US Conference of Mayors, and
four other groups are backing a plan by Utah
Governor Mike Leavitt (R-Utah) which is designed to get
online companies to charge sales taxes on an allegedly "voluntary" basis.
According to an article in Wired News (the online edition of Wired
Magazine), Americans buying products from mail order businesses in other
states are technically required to pay sales taxes -- but in practice, few
are charged sales taxes at present.
Governor Leavitt's proposal will try to encourage online
businesses to "volunteer" to automatically add sales taxes to merchandise
totals. Governments would approve software that Web sites would then use to
charge taxes, based on the shipping destination.
But why should a Web business "volunteer" to start collecting sales taxes,
when doing so would raise their prices and perhaps send customers to other
sites or even to offline businesses?
Well, it's all in how you define "volunteer."
Leavitt says companies might "volunteer" to comply with his proposal in
order to avoid additional government paperwork and red tape -- or to avoid
audits from state and local government tax authorities.
In other words, "volunteer" or we'll come get you. Gov. Leavitt and company
want their plan to be "voluntary" in the same way that the income tax is
voluntary.
The plan, which also calls for Congress to charter private companies to
help facilitate the collection of the tax, has been endorsed by the Council
of State Governments, the National Council of
State Legislators, and the International City County Management
Association. It has been sent to the Advisory Commission on
Electronic Commerce, which Congress created last year and which will
deliver a report on Internet taxation by spring 2000.
Libertarians, other free-marketeers, and others who want to see Web
business continue to grow quickly condemned the plan, which is one of many
proposals for Internet taxes that are circulating. Expect a long battle ahead...
(Source: Wired News article by Declan McCullagh, 11/16/99)
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