Bit by bit, the national sales tax momentum is gaining steam. Dual bills have been introduced in the federal government which is being spurned on by the shoot out between states to establish a revenue stream from booking online sales industry.In the Senate, Lamar Alexander, R-Tenn., Michael Enzi, R-Wyo., and Dick Durbin, D-Ill., are pushing a measure very similar to a House bill being pushed by Steve Womack, R-Ark., and Jackie Speier, D-Calif. The structure to both is similar to what many industry experts are looking for:
- Designating a single rate tax structure for all states
- Creating a single point of collection for the sales tax
- Clearly establishing what items are taxable
There are some differences as well in the bills, specifically measures leaning more toward small businesses.
In terms of history, all current legislation for tax collection are based on a 1992 Supreme Court Case, Quill Corp v. North Dakota. In this case North Dakota attempted to collect sales taxes from Quill based on mail order catalog sales. The court ruled that there needed to be strict standards on having a physical presence in the state to collect taxes, such as an inventory center or retail store. In this case, the Supreme Court stepped in because of a prior case in 1967 which confirmed the governments ability to regulate interstate commerce and taxes. Overall, it’s fascinating to note that present day Internet tax laws are based on mail order catalog sales.
The good news is that legislation is crawling out of the 20th century to catch up with technology. In terms of state sales tax, my best guess says that a law is passed by the end of 2012 and implemented in times for 2013. Hopefully, and likely, this will begin a long line of updated (and possibly streamlined) legislation.