Retailers Advocate Revamping Sales Tax Laws

Although the House of Representatives has voted to extend the Internet tax moratorium until 2006, brick & mortar retailers are joining forces in an effort to encourage Congress to completely rewrite what they consider to be archaeic sales tax laws.

The retailers' goal is to ensure that online retailers charge the same tax as anyone operating outside cyberspace. States are losing money and non-cyber-retailers are losing business to their cyber-competitors as more and more consumers buy online, with no fee for sales tax.

Moreover, retailers are saying that the current ban on new sales taxes does not apply to Internet sales. Instead they argue that the ruling handed down by the Supreme Court in 1992 that ensured a tax would not be charged for any purchases conducted out of state is the primary barrier to taxation of Internet sales.

The current ban on Internet sales tax is in effect until 2001, and the Senate is considering joining forces with the House to support the five-year moratorium on new sales taxes. However, as was recently reported at this site, some Senators are considering supporting an Internet sales tax.

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