States get Another Chance for Internet Tax | AccountingWEB

States get Another Chance for Internet Tax

It looked as if the taxing of goods bought over the Internet was a moot point until at least 2005 (however, see related story), but states may get another chance to get rich based on a new plan being pushed by Sen. John McCain (R-AZ).

McCain and others in Congress have said that they would support Internet taxation if states were to simplify their tax structure. At the end of 2000, 23 states hope to have a strategy by which they can collect online taxes based on a new plan.

The trick is finding a structure that would not be too complicated to enforce, and one in which retailers would have the infrastructure to know what tax rate to charge based on the state in which the buyer lives.

Kansas, Wisconsin, North Carolina and Michigan are testing the waters this fall by coming up with model project involving retailers and software providers. Although the support throughout Congress is mixed regarding a permanent ban on Internet sales, McCain and other legislators hope that the states' efforts will win over the nay-sayers.

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