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US States Vote 26-0 To Move Towards Taxing Non-State Sales
buss_error wrote to us with a breaking news story from ZDNN. 26 states, with three not attending/voting have decided to move towards simpliying their tax codes. Why? So that they can begin to try and tax catalog and Internet sales with their applicable state sales tax. I think it was back in 1967, the Supreme Court ruled that you had to have a "nexus" within the state for the state to charge sales tax because of the patchwork of different sales tax laws. Catalog sales are much higher than Internet sales currently, but the states can see the phenomenal growth of Internet sales and want to reclaim some of the sales tax they are losing. The vote here doesn't mean as much as the actual decision they will make - lots of negotiation still to come, I'm willing to bet. CNNfn has a more detailed report.
The consumer is the one responsible for paying sales tax. Retailers, etc have been providing the service of collecting and remitting the sales tax on behalf of the consumers. They get a discount from the states for doing so.
On all sales on the internet, and from catalog, the consumer is still responsible for paying the sales tax. It has just become common place for retailers to not collect it because it is an enormous pain in the ass for them to keep track of all of the local taxes (there are services like Vertex that will provide this data for a fee). In these Internet sales situations, the consumer is obligated to calculate and remit the tax to their local taxing authority. This just never gets enforced.
So, they aren't going to create any 'new' taxes, they are just going to force retailers to collect the taxes that have always applied. This will be more difficult in some industries than others. For example, with dental products (those sold to dentists, not consumers), the tax classification for each product varies from state to state.